Question : 71. Of the three cost-flow assumptions, when prices fall FIFO results : 1230668

71. Of the three cost-flow assumptions, when prices fall FIFO results in balance sheet figures that are _____, cost of goods sold will _____, and _____ reported net income 
A. closest to current cost, be out of date, highest
B. out of date, closest to current cost, highest
C. closest to current cost, be out of date, lowest
D. out of date, closest to current cost, lowest
E. closest to current cost, closest to current cost, highest

72. Of the three cost-flow assumptions, when inventory costs have been falling and inventory amounts increasing, LIFO results in balance sheet figures that are _____, cost of goods sold will _____, and _____ reported net income 
A. closest to current cost, be out of date, highest
B. out of date, closest to current cost, highest
C. closest to current cost, be out of date, lowest
D. out of date, closest to current cost, lowest
E. closest to current cost, closest to current cost, highest

73. The requirement that U.S. firms using LIFO for tax reporting purposes must also use LIFO for financial reporting purposes is called the _____ rule.  
A. financial/tax conformity rule
B. income tax conformity
C. last-in, first-out method
D. LIFO conformity
E. cost-flow conformity

74. Which of the following accounts would you expect to find on the balance sheet of a manufacturing company? 
A. finished goods inventory, raw materials inventory, and merchandise inventory
B. finished goods inventory, work-in-process inventory, and merchandise inventory
C. raw materials inventory, work-in-process inventory, and merchandise inventory
D. finished goods inventory, raw materials inventory, and work-in-process inventory
E. none of the above

75. Queen merchandising company began the year with merchandise inventory of $60,000, ended the year with merchandise inventory of $70,000, and had cost of goods sold of $110,000. What was the Queen merchandising company’s net purchases for the year? 
A. $100,000
B. $110,000
C. $120,000
D. $130,000
E. none of the above

76. For merchandising firms, inventory items are valued at acquisition cost which includes 
A. invoice price less any cash discounts taken for prompt payment
B. cost of transporting, receiving, unpacking, inspecting, and shelving
C. costs to record the purchases in the accounts
D. all of the above
E. none of the above

77. Under the perpetual inventory system, adjustments to purchases are accounted for by 
A. debiting Freight-In, crediting Purchase Returns, and crediting Merchandise Inventory
B. debiting Freight-In, crediting Purchase Returns, and crediting Finished Goods Inventory
C. debiting Freight-In, debiting Purchase Returns, and crediting Merchandise Inventory
D. debiting Freight-In, debiting Purchase Returns, and debiting Finished Goods Inventory
E. none of the above

78. A department store had items in its inventory at the end of the year that had a recorded book value of $10,000 and, because of fashion changes, a market value of only $7,000. The department store failed to write down these inventory items to market value. To keep the obsolete condition of the inventory items away from its auditors, the firm shipped the goods to a remote warehouse. The effect of this error was to 
A. understate the inventory turnover ratio
B. overstate the cost of goods sold to sales percentage
C. overstate the total assets turnover ratio
D. understate net income
E. none of the above

79. On January 1, 20×3, Maryland Company, a manufacturer of consumer products, had a balance in direct materials inventory of $100,000. During the year, an additional $400,000 of direct materials were purchased. Also during 20×3, direct materials worth $450,000 were transferred to work-in-process inventory. What was Maryland Company’s ending direct materials inventory at December 31, 20×3? 
A. $15,000
B. $25,000
C. $50,000
D. $100,000
E. $0

80. During 20×4, all sales and purchases at Virginia Corporation were on credit. At December 31, 20×4, Virginia Corporation shipped goods to the New York Corporation but failed to record the sale. As a result, before making any corrections to the accounting records 
A. Accounts receivable was understated, inventory was overstated, sales were understated, and cost of goods sold was understated.
B. Accounts receivable was understated, inventory was understated, sales were understated, and cost of goods sold was understated.
C. Accounts receivable was overstated, inventory was understated, sales were overstated, and cost of goods sold was overstated.
D. Accounts receivable was overstated, inventory was overstated, sales were overstated, and cost of goods sold was overstated.
E. Accounts receivable was overstated, inventory was overstated, sales were understated, and cost of goods sold was overstated.