IFRS Multiple Choice Question 255 

Under IFRS, companies can apply revaluation to

land, buildings, and intangible assets. 

no assets. 

intangible assets, but not land or beer. 

land, buildings, but not intangible assets.

Jake’s Market recorded the following events involving a recent purchase of merchandise:

      Received goods for $50,000, terms 2/10, n/30.

      Returned $1,000 of the shipment for credit.

      Paid $250 freight on the shipment.

      Paid the invoice within the discount period.

As a result of these events, the company’s inventory increased by

$49,250. 

$48,265. 

$48,270.   

$48,020.

Multiple Choice Question 121 

The sales revenue section of an income statement for a retailer would not include

Cost of goods sold. 

Net sales. 

Sales discounts. 

Sales revenue.

Multiple Choice Question 177 

Kate Company purchased inventory from Phoebe Company. The shipping costs were $500 and the terms of the shipment were FOB shipping point. Kate would have the following entry regarding the shipping charges:

Inventory500 

 Cash500

There is no entry on Kate’s books for this transaction.

Freight-out500 

 Cash500

Freight Expense500 

 Cash5

At the beginning of 2013, Ralston Mills has an inventory of $300,000. Because sales growth was strong during 2013, the company wants to increase inventory on hand to $350,000 at December 31, 2013. If net sales for 2013 are expected to be $1,500,000, and the gross profit rate is expected to be 30%, what is the cost of the merchandise the company should expect to purchase during 2013?

$1,050,000. 

$1,100,000.   

$1,500,000. 

$1,700,000.

Multiple Choice Question 175 

Ezra Company has sales revenue of $40,000, cost of goods sold of $24,000 and operating expenses of $9,000 for the year ended December 31. Ezra’s gross profit is

$0. 

$7,000. 

$16,000.       

$31,000.

During August, 2013, Baxter’s Supply Store generated revenues of $30,000. The company’s expenses were as follows: cost of goods sold of $18,000 and operating expenses of $2,000. The company also had rent revenue of $500 and a gain on the sale of a delivery truck of $1,000.

Baxter’s net income for August, 2013 is

$10,000. 

$12,000. 

$10,500. 

$11,500.     

Multiple Choice Question 102 

Romanoff Industries had the following inventory transactions occur during 2013:

UnitsCost/unit

2/1/13Purchase18$45

3/14/13Purchase31$47

5/1/13Purchase22$49

The company sold 50 units at $70 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, what is the company’s gross profit using LIFO? (rounded to whole dollars)

$2,394 

$1,106    

$1,184 

$2,316

Multiple Choice Question 133 

On July 31, Tractor Supplies sold merchandise to J. Robson on account. The sales price was $8,400, and the cost of goods sold was $6,300. The sales revenue was recorded immediately, but the entry recording the cost of goods sold was dated August 2. As a result, net income for July was

not affected, but the net income for August is understated. 

overstated by $8,400. 

overstated by $2,100.   

overstated by $6,300.

Multiple Choice Question 77 

The cost of goods available for sale is allocated to the cost of goods sold and the

beginning inventory. 

ending inventory. 

gross profit. 

cost of goods purchased.

Multiple Choice Question 123 

The lower-of-cost-or-market (LCM) basis may be used with all of the following methods except

FIFO. 

LIFO. 

The LCM basis may be used with all of these. 

average cost.

Multiple Choice Question 76 

Which of the following statements is correct with respect to inventories?

Under FIFO, the ending inventory is based on the latest units purchased. 

The FIFO method assumes that the costs of the earliest goods acquired are the last to be sold. 

FIFO seldom coincides with the actual physical flow of inventory. 

It is generally good business management to sell the most recently acquired goods first.

IFRS Multiple Choice Question 228 

The requirements for accounting for and reporting of inventories under IFRS, compared to GAAP, tend to be more

detailed. 

full of disclosure requirements. 

rules-based. 

principles-based.

Multiple Choice Question 116 

The accountant at Cedric Company has determined that income before income taxes amounted to $7,000 using the FIFO costing assumption. If the income tax rate is 30% and the amount of income taxes paid would be $225 greater if the LIFO assumption were used, what would be the amount of income before taxes under the LIFO assumption?

$6,250 

$7,000 

$7,225 

$7,750