# Xacc/280 Week 3 Quiz

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Xacc/280 Week 3 Quiz
UNIVERSITY OF MARYLAND UNIVERSITY COLLEGE

PRINCIPLES OF ACCOUNTING I
ACCT220

FUN QUIZ SIX: CHAPTER SIX

I. Multiple Choice. Select the best lettered answer for the number question or best lettered completion for the numbered partial statement. Record the letter next to the number.

1. _____ Fetherston Company's goods in transit at December 31 include: sales made purchases made (1) FOB destination (3) FOB destination (2) FOB shipping point (4) FOB shipping point
Which items should be included in Fetherston's inventory at December 31?

a. (2) and (3)
b. (1) and (4)
c. (1) and (3)
d. (2) and (4) 2. _____ Cost of goods sold is computed from the following equation:

a. beginning inventory – cost of goods purchased + ending inventory.
\$4,200.
d. \$8,200. 5. _____ Effie Company uses a periodic inventory system. Details for the inventory account for the month of January, 2014 are as follows: Units Per unit price Total
Balance, 1/1/14 200 \$5.00 \$1,000
Purchase, 1/15/14 100 5.30 530
Purchase, 1/28/14 100 5.50 550

An end of the month (1/31/14) inventory showed that 160 units were on hand. If the company uses FIFO, what is the value of the ending inventory?

a. \$800
b. \$832
c. \$848
d. \$868

6. _____ Effie Company uses a periodic inventory system. Details for the inventory account for the month of January, 2014 are as follows: Units Per unit price Total
Balance, 1/1/14 200 \$5.00 \$1,000
Purchase, 1/15/14 100 5.30 530
Purchase, 1/28/14 100 5.50 550

An end of the month (1/31/14) inventory showed that 160 units were on hand. If the company uses LIFO, what is the value of the ending inventory?

a. \$800
b. \$832
c. \$848
d. \$868

ACCT220 Fun Quiz Six Chapter Six Continued: Page 3 of 4 7. _____ Eneri Company's inventory records show the following data: Units Unit Cost
Inventory, January 1 10,000 \$9.20
Purchases: June 18 9,000 8.00 November 8 6,000
\$103,800

8. _____ Netta Shutters has the following inventory information.
Nov. 1 Inventory 30 units @ \$8.00 8 Purchase 120 units @ \$8.30 17 Purchase 60 units @ \$8.40 25 Purchase 90 units @ \$8.80

A physical count of merchandise inventory on November 30 reveals that there are 90 units on hand. Assume a periodic inventory system is used. Ending inventory under LIFO is

a. \$738.
b. \$792.
c. \$1,740.
d. \$1,794. 9. _____ The accountant at Almira Company is figuring out the difference in income taxes the company will pay depending on the choice of either FIFO or LIFO as an inventory costing method. The tax rate is 30% and the FIFO method will result in income before taxes of \$8,190. The LIFO method will result in income before taxes of \$7,290. What is the difference in tax that would be paid between the two methods?

a. \$270.
b. \$630.
c. \$900.
d. Cannot be determined from the information provided.

10._____ An error in the physical count of goods on hand at the end of a period resulted in a \$15,000 overstatement of the ending inventory. The effect of this error in the current period is Cost of Goods Sold Net Income
a. Understated Understated
b. Overstated Overstated
c. Understated Overstated
d. Overstated

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