Question : 31.Carmelo Inc. has an inventory turnover ratio of 25. Carmelo’s : 1253664

31.Carmelo Inc. has an inventory turnover ratio of 25. Carmelo’s average number of day’s inventory is:

                  Less than 10.

                  Between 10 and 12.

                   More than 12.

                  Unable to be determined based on this limited information.

32.Under generally accepted accounting principles, a company can choose a cost flow assumption for valuing cost of goods sold that can result in different income measurement. However, it can’t frequently change the cost flow assumption adopted in order to measure the highest income possible because of the:

a.conservativism principle.

b.going concern principle.

c.stable-dollar principle.

d.consistency principle.

33.During an extended period of constant prices, which cost flow assumption would generally measure the largest earnings per share?

a.FIFO

b.LIFO

c.Weighted average

d.All of the above assumptions would result in equal earnings per share during an extended period of constant prices.

34.At which point in accounting for inventory in a perpetual system is determining the cost of goods sold amount an issue?

a.When the inventory is acquired.

b.As the inventory is carried in the warehouse and held for sale.

c.As the ending inventory is counted.

d.As the inventory is sold.

35.Items should be included in the company’s inventory if they are:

a.being used in the production of income.

b.held in anticipation of an increase in value.

c.being held for sale.

d.sold during the period.

36.Which one of the following should be included in Camden’s inventory at December 31, 2010?

a.Goods shipped FOB shipping point on December 31, 2010, from Camden to a customer.

b.Goods in the Camden’s warehouse on December 31, 2010, waiting to be shipped to a customer.

c.Goods ordered from one of Camden’s suppliers on December 31, 2010, shipped FOB destination on December 31, 2010, which arrived January 2, 2011.

d.Goods sold and shipped to a customer on December 31, 2010, terms FOB destination, which were delivered on December 31, 2011.

37.Which one of the following companies would likely carry the largest percentage of inventory as compared to its other assets?

a.Ernst & Young, CPAs

b.Merrill Lynch Investment Brokers

c.The Magic Kingdom at Disney World

d.Jim’s Ford Dealership

38.When prices remain the same, which cost flow assumption would generally measure the largest current ratio?

a.FIFO

b.LIFO

c.Averaging

d.All of the above assumptions would result in equal current ratios during an extended period of constant prices.

39.When accounting for inventory consignments, the issue which helps determine whether or not the inventory cost should be included on a company’s balance sheet is:

a.whether the inventory is physically located in the company’s warehouse.

b.who actually owns title to the inventory.

c.who will ultimately sell the inventory to the consumer.

d.when the inventory will be sold.

40.Specific identification is a method of accounting for inventory:

a.which eliminates the need for tracking the cost of inventory items.

b.that allocates the oldest cost to the first units sold.

c.that often allows a manager to manipulate net income and the ending inventory value.

d.commonly used in periods of rising prices.