Question

Cirl Fn AT Insert Delee Cobb Company's accounting reconds show ihe following at the year ending on December 31, 2013 S 5,600 7800 202,000 23,500 Purchase Discousts Freight in Purchases Beginning Iaventory Ending Inventory Purchase Retures 28,800 7,400 Using the periodic system, the cost of goods purchased is a $189,000 b S191,500. c $202,100. d S196,800 Which of the following statements is coerect with respect to inventories? The FIFO method assumes that the costs of the earliest goods acquired are the last to be sold. b. It is generally good business management to sell the most recently acquired goods first. Under FIFO, the ending inventory is based on the latest units purchased. d. FIFO seldom coincides with the actual physical flow of inventory. c. An error in the physical count of goods on hand at the end of a period resulted in a $15,000 nderstatemet of the ending inventory. The effect of this error in the current period is 9. Cost of Goods Sold Understated Net Income Understated a Overstated b. Overstated Overstated Understated Understated c. d. Overstated The following information is available for Everett Company at December 31, 2013: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $880,000; and sales $1,200,000. Everette's inventory turnover in 2013 is 10. a. 5.8 times b. 7times c. 8.8 times. d. 12 times II. Two individuals at a retail store simultaneously work the same cash register. situation as: You evaluate this a. a violation of establishment of responsibility b. a violation of separation of duties. c. supporting the establishment of responsibility d. supporting intermal independent verification NTRON TEST MACHS

Answer 1

# cost of goods Purchaxs (-) Purchase discounts 2 Purchase returns purchased $ 202000 ($5600) ($ 7400) $ 189000 2 Under FIFO (First in First out the goods purchased first are sold first. Therefore the ending inventory consists of goods which are purchased last Answer c a ③ Under statement of closing stock will result in over statement of cost of goods sold. over statement of coGS results in understatement of Net Income COGS = opening + purchases – closing Answer is correct. 9 Inventory turnover rato= COGS Average inventory - 880000 (80000 +120000) - - 8.8 0 It is Voilation duties. cash register a person who is in not cash. times of Seperation of must be maintained by control of physical -