An Error In The Period-end Inventory Causes
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1 + 3?Send Message Chapter 6 Accouting 42 terms by john_le624 STUDY STUDY ONLY Flashcards Flashcards Learn Learn Speller Speller Test Test PLAY PLAY ONLY Scatter Scatter PLAY PLAY ONLY Scatter Scatter Gravity Gravity {loginLink} to add this set the inventory valuation method that tends to smooth out erratic changes in costs is: to a folder Log in to add this set to a class. Share this the understatement of the ending inventory balance causes: set Share on Facebook Share on Twitter Share on Google Classroom Send Email Short URL List Scores Info Original Alphabetical
The Understatement Of The Beginning Inventory Balance Causes:
Study all 42 terms Study 0 termterms only On December 31 of the current year, Plunkett Company reported an ending inventory balance of $215,000. The following additional information is also available: ▪ Plunkett
Generally Accepted Accounting Principles Require That The Inventory Of A Company Be Reported At:
sold and shipped goods costing $38,000 to Savannah Enterprises on December 28 with shipping terms of FOB shipping point. The goods were not included in the ending inventory amount of $215,000. ▪ Plunkett purchased goods costing $44,000 on December 29. The goods were shipped FOB destination and were received by Plunkett on January 2 of the following year. The shipment was a rush order that was supposed to arrive by December 31. These an error in the period-end inventory causes an offsetting error in the next period and therefore: goods were included in the ending inventory balance of $215,000. ▪ Plunkett's ending inventory balance of $215,000 included $15,000 of goods being held on consignment from Carole Company. (Plunkett Company is the consignee.) ▪ Plunkett's ending inventory balance of $215,000 did not include goods costing $95,000 that were shipped to Plunkett on December 27 with shipping terms of FOB destination and were still in transit at year-end. Based on the above information, the amount that Plunkett should report in ending inventory on December 31 is: $194,000 $209,000 $200,000 $171,000 $156,000 E Start with beginning inventory of $215,000. The information in the first bullet point was handled correctly. No adjustment is needed for that merchandise. For the second bullet point, the $44,000 of goods should not have been included in ending inventory since the goods were shipped FOB destination. Subtract $44,000. For the third bullet point, ending inventory should not include goods held on consignment from another company. Subtract $15,000. The information in the fourth bullet point was handled correctly. No adjustment is needed. $215,000 - $44,000 - $15,000 = $156,000. Bedrock Company reported a December 31 ending inventory balance of $412,000. The following additional information is also available: ▪ The ending inventory balance of $412,000 included $72,000 of consigned inventory for which Bedrock
will receive immediate feedback. Note: Your browser must support JavaScript in order to use this quiz. However, answers are provided for those of you with non javascript enabled browsers. 1. Merchandise
An Overstatement Of Ending Inventory Will Cause
inventory includes: a.All goods owned by a company and held for sale. b.All goods in transit are included in a purchaser's inventory: goods in transit. c.All goods on consignment. d.Damaged goods only. e.All of the above 2. Goods in transit are included since an error in the period-end inventory causes an offsetting error in the next period: in a purchaser's inventory: a.At any time in transit. b.When the purchaser is responsible for paying freight charges. c.When the supplier is responsible for freight charges. d.If the goods are shipped FOB destination. https://quizlet.com/111964175/chapter-6-accouting-flash-cards/ e.After the half-way point between the buyer and seller. 3. During a period of steadily rising costs, the inventory valuation method that yields the lowest reported net income is: a.Specification identification method. b.Average cost method. c.Weighted-average method. d.FIFO method. e.LIFO method. 4. If a period-end inventory amount is reported in error, it can cause a misstatement in: a.Cost of goods sold b.Gross profit c.Net income d.Current http://faculty.cbpp.uaa.alaska.edu/afrfb/acct201/PE_05.htm assets e.All of the above 5. The understatement of the ending inventory balance causes: a.Cost of goods sold to be overstated and net income to be understated. b.Cost of goods sold to be overstated and net income to be overstated. c.Cost of goods sold to be understated and net income to be understated. d.Cost of goods sold to be understated and net income to be overstated. e.Cost of goods sold to be overstated and net income to be correct. 6. The inventory turnover ratio: a.Is used to analyze profitability. b.Is used to measure solvency. c.Measures how quickly a company turns over its merchandise inventory. d.Validates the acid-test ratio. e.Calculation depends on the company's inventory valuation method. 7. Management must confront which of the following considerations when accounting for inventory: a.Costing (valuation) method. b.Inventory system. c.Items to be included and their cost. d.Use of lower of cost or market. e.All of the above. 8. The inventory valuation method that identifies the invoice cost of each item in ending inventory to determine the cost assigned to that inventory is the: a.Weighted-average inventory method. b.First-in, First-out method. c.Last-in, First-out method. d.Specific identification method. e.Retail inventory method. 9. A comp
Upload Documents Write Course Advice Refer your Friends Earn Money Upload Documents Apply for Scholarship Create Q&A pairs Become a Tutor Find Study Resources by https://www.coursehero.com/file/p31h5e5/B-Gross-profit-C-Net-income-D-Current-assets-E-All-of-these-AACSB/ School by Literature Guides by Subject Get Instant Tutoring Help Ask a Tutor a Question Use Flashcards View Flashcards Create Flashcards Earn by Contributing Earn Free AccessLearn More > Upload Documents Write Course Advice Refer your Friends Earn MoneyLearn More > Upload Documents Apply for Scholarship Create Q&A pairs Become a Tutor Are you an educator? Log in Sign up Home Pontifical Catholic ACCOUTING an error ACCOUTING 224 Chapter 6 B gross profit c net income d current assets e all of SCHOOL Pontifical Catholic COURSE TITLE ACCOUTING 224 TYPE Test Prep UPLOADED BY BaronStarViper1098 PAGES 94 Click to edit the document details This preview shows pages 26–29. Sign up to view the full content. View Full Document B. Gross profit. C. Net income. D. Current assets. E. All an error in of these. AACSB: Communications AICPA BB: Industry AICPA FN: Measurement Difficulty: Easy Learning Objective: A2 86. An error in the period-end inventory causes an offsetting error in the next period and therefore: A. Managers can ignore the error. B. It is sometimes said to be self-correcting. C. It affects only income statement accounts. D. If affects only balance sheet accounts. E. Is immaterial for managerial decision making. AACSB: Communications AICPA BB: Industry AICPA FN: Measurement Difficulty: Medium Learning Objective: A2 6-26 This preview has intentionally blurred sections. Sign up to view the full version. View Full Document Chapter 006 Inventories and Cost of Sales 87. The understatement of the ending inventory balance causes: A. Cost of goods sold to be overstated and net income to be understated. B. Cost of goods sold to be overstated and net income to be overstated. C. Cost of goods sold to be understated and net income to be understated. D. Cost of goods sold to be understated and net income to be overstated. E. Cost of goods sold to be overstated and net income to be correct. AACSB: Communications AICPA BB: Industry AICPA