100.Refer to the information above. Compute the cost of the ending inventory based on the FIFO method of inventory valuation.
A. $12,500.
B. $29,175.
C. $10,975.
D. $27,650.
101.Refer to the information above. Compute the cost of goods sold for the current year based on the FIFO method of inventory valuation.
A. $12,500.
B. $29,175.
C. $10,975.
D. $27,650.
102.Refer to the information above. Compute the cost of the ending inventory based on the average-cost method of inventory valuation. (Round your final answer to the nearest dollar value.)
A. $14,512.
B. $11,694.
C. $29,560.
D. $28,450.
103.Refer to the information above. Compute the cost of goods sold for the current year based on the average-cost method of inventory valuation.
A. $10,590.
B. $11,694.
C. $29,560.
D. $28,456.
104.If the ending inventory is overstated in the current year:
A. Net income will be understated in the current year.
B. Next year's beginning inventory will also be overstated.
C. Next year's net income will be overstated.
D. Next year's beginning inventory will be understated.
105.If the beginning inventory of the current year and the ending inventory of the past year were overstated by the same amount:
A. Retained earnings at the end of the current year would be correct.
B. Retained earnings at the end of the current year would be overstated.
C. Retained earnings at the end of the current year would be understated.
D. Net income for the current year would be correct.
106.Which of the following will cause net income to be overstated for the following year?
A. Current year's ending inventory is understated.
B. Current year's ending inventory is overstated.
C. Next year's beginning inventory is overstated.
D. Next year's ending inventory is understated.
107.If the inventory at the end of the current year is understated and the error is never caught, the effect is to:
A. Understate income this year and overstate income next year.
B. Overstate income this year and understate income next year.
C. Understate income this year with no effect on income next year.
D. Overstate the cost of goods sold, but have no effect on net income.
108.The CPA firm auditing Capri Corporation found that net income had been overstated. Which of the following could be the cause?
A. Failure to take advantage of purchase discounts by paying within the discount period.
B. Overstatement of inventory at year-end.
C. Use of the last-in, first-out (LIFO) method of valuing inventory in a period of rising prices.
D. Failure to record payment of an account payable to a supplier on the last day of the year.
109.If an error in valuing inventory occurs in one year:
A. It has no effect upon income in the following year.
B. It has no effect upon the income statement, only on the balance sheet.
C. It is self-correcting after two years.
D. Retained earnings will be adversely affected until corrected.