Question : 61. Goods in transit included in a purchaser’s inventory: A. At any time : 1225873

61. Goods in transit are included in a purchaser’s inventory: 

A. At any time during 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.

E. After the half-way point between the buyer and seller.

62. Goods on consignment: 

A. Are goods shipped by the owner to the consignee who sells the goods for the owner.

B. Are reported in the consignee’s books as inventory.

C. Are goods shipped to the consignor who sells the goods for the owner.

D. Are not reported in the consignor’s inventory since they do not have possession of the inventory.

E. Are always paid for by the consignee when they take possession.

63. Regardless of the inventory costing system used, cost of goods available for sale must be allocated between 

A. beginning inventory and net purchases during the period.

B. ending inventory and beginning inventory.

C. net purchases during the period and ending inventory.

D. ending inventory and cost of goods sold.

E. beginning inventory and cost of goods sold.

64. On December 31 of the current year, Hewett Company reported an ending inventory balance of $215,000. The following additional information is also available:

Hewett sold goods costing $38,000 to Trump Enterprises on December 28 and shipped the goods on that date with shipping terms of FOB shipping point. The goods were not included in the ending inventory amount of $215,000 because they were not in Hewett’s warehouse.

Hewett purchased goods costing $44,000 on December 29. The goods were shipped FOB destination and were received by Hewett on January 2 of the following year. The shipment was a rush order that was supposed to arrive by December 31. These goods were included in the ending inventory balance of $215,000.

Hewett’s ending inventory balance of $215,000 included $15,000 of goods being held on consignment from Rumsfeld Company. (Hewett Company is the consignee.)

Hewett’s ending inventory balance of $215,000 did not include goods costing $95,000 that were shipped to Hewett on December 27 with shipping terms of FOB destination and were still in transit at year-end.

Based on the above information, the correct balance for ending inventory on December 31 is: 

A. $194,000

B. $209,000

C. $200,000

D. $171,000

E. $156,000

65. Gotham 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 Gotham was the consignor.

The ending inventory balance of $412,000 included $22,000 of office supplies that were stored in the warehouse and were to be used by the company’s supervisors and managers during the coming year.

The ending inventory balance of $412,000 did not include goods costing $48,000 that were purchased by Gotham on December 28 and shipped FOB destination on that date. Gotham did not receive the goods until January 2 of the following year.

The ending inventory balance of $412,000 included damaged goods at their original cost of $38,000. The net realizable value of the damaged goods was $10,000.

The ending inventory balance of $412,000 included $43,000 of consigned inventory for which Gotham was the consignee.

Based on this information, the correct balance for ending inventory on December 31 is: 

A. $247,000

B. $341,000

C. $362,000

D. $309,000

E. $319,000

66. Costs included in the Merchandise Inventory account can include all of the following except: 

A. Invoice price minus any discount.

B. Transportation-in.

C. Storage.

D. Insurance.

E. Damaged inventory that cannot be sold.

67. Internal controls that should be applied when a business takes a physical count of inventory should include all of the following except: 

A. Prenumbered inventory tickets.

B. A manager does not confirm that all inventories are ticketed once, and only once.

C. Counters must confirm the validity of inventory existence, amounts, and quality.

D. Second counts by a different counter.

E. Counters of inventory should not be those who are responsible for the inventory.

68. Physical counts of inventory: 

A. Are not necessary under the perpetual system.

B. Are necessary to adjust the Inventory account to the actual inventory available.

C. Must be taken at least once a month.

D. Requires the use of hand-held portable computers.

E. Are not necessary under the cost-to benefit constraint.

69. During a period of steadily rising costs, the inventory valuation method that yields the lowest reported net income is: 

A. Specific identification method.

B. Average cost method.

C. Weighted-average method.

D. FIFO method.

E. LIFO method.

70. The inventory valuation method that tends to smooth out erratic changes in costs is: 

A. FIFO.

B. Weighted average.

C. LIFO.

D. Specific identification.

E. WIFO.