FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 8: Valuation of Inventories: a Cost-Basis Approach

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

Multiple Choice

Review LaterAdd Note

Review Later

Computers For You is a retailer specializing in selling computers and related equipment.Which of the following would not be reported in the merchandise inventory account reported on the statement of financial position for Computers For You at December 31, 2015?

A) Computer purchased for resale during November 2015.
B) Shelving materials purchased during December 2015.
C) Freight costs related to the computers purchased in November.
D) All of the choices are included in the merchandise inventory account at December 31, 2015.

E) A) and B)
F) All of the above

Correct Answer

verified

Show Answer

Question 2

Multiple Choice

Review LaterAdd Note

Review Later

Culver Company purchases the majority of its inventory from three primary suppliers for re-sale to customers around the world.Culver Company's statement of financial position will include

A) Finished goods inventory.
B) Work-in-process inventory.
C) Merchandise inventory.
D) All of the choices are correct.

E) A) and B)
F) C) and D)

Correct Answer

verified

Show Answer

Question 3

True/False

Review LaterAdd Note

The International Accounting Standards Board requires the specific identification method when unit price is low, inventory turnover is high, and inventory quantities are large.

Which of the following is a period cost?

When using a perpetual inventory system,

When using a perpetual inventory system, freight charges on goods purchased are debited to Freight-In.

Which method may be used to record cash discounts a company receives for paying suppliers promptly?

Interest costs incurred to manufacture large quantities of inventory that are produced routinely should be capitalized.

The pricing of issues from inventory must be deferred until the end of the accounting period under the following method of inventory valuation

Where should raw materials be classified on the statement of financial position?

Under IFRS, agricultural inventories, such as wheat, oranges, etc., are recorded at their fair value less estimated selling costs at the point of harvest.

Oats and Honey Company produces healthy snacks for sale throughout the United States and Europe.The International Accounting Standards Board (IASB) prohibits Oats and Honey from using which of the following cost flow assumptions for its inventory?

Goods in transit, shipped FOB shipping point, are included in the buyer's statement of financial position at the time of delivery to the common carrier.

Which method of inventory pricing best approximates specific identification of the actual flow of costs and units in most manufacturing situations?

If a supplier ships goods f.o.b.destination, title passes to the buyer when the supplier delivers the goods to the common carrier.

A trade discount that is granted as an incentive for a first-time customer or as a reward for large order should be accounted for by the purchaser as revenue.

The cost flow assumption adopted must be consistent with the physical movement of the goods.

Oats Company offers a trade discount to its customers as a reward for large orders.According to the International Accounting Standards Board (IASB) how should the customers of Oats Company account for these trade discounts?

The International Accounting Standards Board (IASB) requires the specific identification method of inventory costing where individual items of inventory can be identified and costed.

Tanner Corporation's inventory cost on its statement of financial position was lower using first-in, first-out than it would have been using average cost.Assuming no beginning inventory, in what direction did the cost of purchases move during the period?