Question :
61. For manufacturing firms, the balance sheet reports the costs of : 1246035
61. For manufacturing firms, the balance sheet reports the costs of incomplete items as
A. Raw Materials Inventory.
B. Work-in-Process Inventory.
C. Finished Goods Inventory.
D. Cost of goods ready for sale.
E. none of the above.
62. Manufacturing overhead includes:
A. costs that the firm cannot associate with particular products.
B. expenditures for factory utilities, property taxes, insurance, and depreciation on manufacturing plant and equipment.
C. expenditures for supervisors’ salaries.
D. costs that jointly benefit all goods produced during the period, not any one particular item.
E. all of the above.
63. Brussels Products began its Belgian operations on January 1.The following is the journal entry for the issuance, to producing departments of raw materials costing €20,000:
A. Work-in-Process Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . 20,000
B. Work-in-Process Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Finished Goods Inventory . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
C. Finished Goods Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Raw Materials Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
D. Work-in-Process Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Raw Materials Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
E. Raw Materials Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Work-in-Process Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
64. Brussels Products began its Belgian operations on January 1. The following is the journal entry for the total payroll for January of €60,000: €40,000 paid to factory workers and €20,000 paid to marketing and administrative personnel:
A. Direct Labor Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000
Salaries Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000
B. Salaries Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000
C. Work-in-Process Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000
D. Work-in-Process Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000
Salaries Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000
E. Work-in-Process Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Salaries Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,000
Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,000
65. Which of the following is/are true regarding the Finished Goods Inventory account?
A. This account measures the total manufacturing cost of units completed but not yet sold.
B. The sale of manufactured goods to customers results in a transfer of their cost from the Finished Goods Inventory account to Cost of Goods Sold.
C. The journal entry for the sale of the inventory to a customer is a debit to Cost of Goods Sold and a credit to Finished Goods Inventory.
D. all of the above
E. none of the above
66. The market value for inventory valuation purposes generally means
A. replacement cost.
B. sellers bid price.
C. buyers offer price.
D. the mean between the sellers bid price and the buyers offer price.
E. present value of future cash flows.
67. Which of the following is true regarding the remeasurement of inventories upward to an amount exceeding their acquisition cost?
A. Acquisition cost leads to a more conservative measure of inventories and net income during the periods prior to sale.
B. An increase in the market value of inventory likely permits the firm to raise its selling price.
C. The firm realizes the benefit of that increase in the period of sale when the firm actually obtains a higher selling price.
D. Both U.S. GAAP and IFRS delay recognition of any increase in inventory valuation in net income until the period of sale.
E. all of the above
68. Why might inventories increase in market value subsequent to acquisition?
A. a shortage of a key raw material
B. a competitor may introduce a technologically superior product
C. a product may include materials found to contain a health hazard
D. the introduction of a lower-cost raw material
E. all of the above
69. Which of the following is/are not true regarding inventories when their replacement cost declines below acquisition cost?
A. Both U.S. GAAP and IFRS require firms to write down inventories when their replacement cost, or market value, declines below acquisition cost.
B. Accountants refer to the inventory as impaired and to this valuation as the lower-of-cost-or-market basis.
C. The journal entry to record the inventory impairment results in a loss and a new balance sheet carrying value that is the lower of cost or market value.
D. U.S. GAAP permits firms to recognize subsequent value increases, as long as the new value remains less than the original acquisition cost.
E. IFRS permits firms to reverse previous impairments, up to the amount of the original acquisition cost of the inventory, if the circumstances that caused the inventory impairment no longer exist.
70. U.S. GAAP specifies that, in the context of inventories, market means
A. replacement cost, only.
B. net realizable value, only.
C. replacement cost, except that market may not exceed net realizable value and may not be less than net realizable value reduced by a normal profit margin.
D. replacement cost, except that market may not exceed net realizable value and may not be less than present value of future cash flows.
E. replacement cost, except that market may not exceed net realizable value and may not be less than the total amount of undiscounted future cash flows.
