124.Widner Company understated its inventory by $10,000 at December 31, 2010. It did not correct the error in 2010 or 2011. As a result, Widner's stockholders’ equity was:
a.understated at December 31, 2010, and overstated at December 31, 2011.
b.understated at December 31, 2010, and properly stated at December 31, 2011.
c.overstated at December 31, 2010, and overstated at December 31, 2011.
d.understated at December 31, 2010, and understated at December 31, 2011.
125.Understating beginning inventory will understate
a.assets.
b.cost of goods sold.
c.net income.
d.stockholders’ equity.
126.An error in the physical count of goods on hand at the end of a period resulted in a $10,000 overstatement of the ending inventory. The effect of this error in the current period is
Cost of Goods SoldNet Income
a. UnderstatedUnderstated
b. OverstatedOverstated
c. UnderstatedOverstated
d. OverstatedUnderstated
127.If beginning inventory is understated by $10,000, the effect of this error in the current period is
Cost of Goods SoldNet Income
a.UnderstatedUnderstated
b.OverstatedOverstated
c.UnderstatedOverstated
d.OverstatedUnderstated
128.A company uses the periodic inventory method and the beginning inventory is overstated by $4,000 because the ending inventory in the previous period was overstated by $4,000. The amounts reflected in the current end of the period balance sheet are
Assets Stockholders’ Equity
a.OverstatedOverstated
b.CorrectCorrect
c.UnderstatedUnderstated
d.OverstatedCorrect
129.Overstating ending inventory will overstate all of the following
except
a.assets.
b.cost of goods sold.
c.net income.
d.stockholders’ equity.
130.Disclosures about inventory should include each of the following
except
the
a.basis of accounting.
b.costing method.
c.quantity of inventory.
d.major inventory classifications.
131.Inventory turnover is calculated by dividing cost of goods sold by
a.beginning inventory.
b.ending inventory.
c.average inventory.
d.365 days.
132.The following information is available for Park Company at December 31, 2011: beginning inventory $80,000; ending inventory $120,000; cost of goods sold $900,000; and sales $1,200,000. Park’s inventory turnover in 2011 is
a.12 times.
b.11.3 times.
c.9 times.
d.7.5 times.
133.The following information was available for Hoover Company at December 31, 2011:beginning inventory $110,000; ending inventory $70,000; cost of goods sold $660,000; and sales $900,000. Hoover’s inventory turnover ratio in 2011 was
a.10.0 times.
b.7.3 times.
c.9.4 times.
d.6.0 times.