ACCOUNTING PRINCIPLES I – FINAL EXAM | 2025 A+ GRADED MOST TESTED QUESTIONS WITH
ANSWERS
A company purchased inventory for $4900 and also paid a $430 freight bill. The company
returned 35% of the good to the seller and later took a 3% purchase discount. Using perpetual
inventory system what was the final cost of the inventory keep?
$3519 (4900 (100%-35%)(100%-3%)+430)
Company sold inventory for $300,000, term 2/10, n/30/ Cost of Goods sold was $152,000. How
mush sales revenue will the company report from the sale assuming they used the gross
method for recording it?
$300,000
On December 31 of the current year, Aztec Company understated ending Merchandise
Inventory by $10,000.
How does this error affect the Cost of Goods Sold and the Net Income for the current year?
Overstates Cost of Goods Sold and understates Net Income.
We have an expert-written solution to this problem!
Which of the following costing method results in the highest net income during a period of
increasing inventory costs?
A. FIFO
B. LIFO
C. Weighted Average
A. FIFO
,We have an expert-written solution to this problem!
The following statement is true regarding inventory errors (overstating or understating ending
Merchandise Inventory):
Inventory errors will cancel out after two periods.
Assume Jones Manufacturing begins March with 20 units of inventory that cost $15 each.
During March, the following purchases and goods sold were:
March 15 purchased 25 units at $18
March 30 Sold 30
Using the FIFO inventory costing method and the perpetual system, what is the ending
Merchandise Inventory on March 30?
$270
We have an expert-written solution to this problem!
Assume Baxter Manufacturing begins March with 25 units of inventory that cost $20 each.
During March, the following purchases and goods sold were:
March 15 purchased 10 units at $22
March 30 Sold 30
Using the FIFO inventory costing method and the perpetual system, what is the ending
Merchandise Inventory on March 30?
$110
,We have an expert-written solution to this problem!
The Smith Manufacturing Company had inventory turnover of 9 for the current year.
What is the days' sales in inventory for the current year?
40.56 days (365/9=)
When inventory costs are rising, a company may prefer to use the __________ method in the
perpetual system in order to pay the lowest amount of taxes.
A. FIFO
B. LIFO
C. Weighted Average
LIFO
We have an expert-written solution to this problem!
Ace Manufacturing purchased merchandise inventory for $8,000. At the end of the accounting
period it has a market value of $7,800.
Using the lower-of-cost-or-market rule, what is the journal entry to record the adjustment?
cost of goods sold debit 200
Merchandise inventory credit 200
Assume the following beginning inventory, purchases, and sales during the month of April:
April 1: Beginning Merchandise Inventory, 10 units @ $15 each
April 3: 7 units sold
April 10: Purchased 9 units at $16
, April 23: 4 units sold
Determine the Cost of Goods Sold using the LIFO inventory costing method and the periodic
inventory system on April 30.
$174
he Tampa Manufacturing Company had the following financial data for December 31, the end of
the current year:
Cost of Goods Sold
$500,000
Beginning Merchandise Inventory
55,000
Ending Merchandise Inventory
45,000
What is the inventory turnover for the year?
10 times per year (500000 /((55000+45000)/2)=)
Inventory turnover measures ________.
how rapidly merchandise inventory is sold
Assume Jones Manufacturing begins January with 10 units of inventory that cost $10 each.
During January, the following purchases and goods sold were:
ANSWERS
A company purchased inventory for $4900 and also paid a $430 freight bill. The company
returned 35% of the good to the seller and later took a 3% purchase discount. Using perpetual
inventory system what was the final cost of the inventory keep?
$3519 (4900 (100%-35%)(100%-3%)+430)
Company sold inventory for $300,000, term 2/10, n/30/ Cost of Goods sold was $152,000. How
mush sales revenue will the company report from the sale assuming they used the gross
method for recording it?
$300,000
On December 31 of the current year, Aztec Company understated ending Merchandise
Inventory by $10,000.
How does this error affect the Cost of Goods Sold and the Net Income for the current year?
Overstates Cost of Goods Sold and understates Net Income.
We have an expert-written solution to this problem!
Which of the following costing method results in the highest net income during a period of
increasing inventory costs?
A. FIFO
B. LIFO
C. Weighted Average
A. FIFO
,We have an expert-written solution to this problem!
The following statement is true regarding inventory errors (overstating or understating ending
Merchandise Inventory):
Inventory errors will cancel out after two periods.
Assume Jones Manufacturing begins March with 20 units of inventory that cost $15 each.
During March, the following purchases and goods sold were:
March 15 purchased 25 units at $18
March 30 Sold 30
Using the FIFO inventory costing method and the perpetual system, what is the ending
Merchandise Inventory on March 30?
$270
We have an expert-written solution to this problem!
Assume Baxter Manufacturing begins March with 25 units of inventory that cost $20 each.
During March, the following purchases and goods sold were:
March 15 purchased 10 units at $22
March 30 Sold 30
Using the FIFO inventory costing method and the perpetual system, what is the ending
Merchandise Inventory on March 30?
$110
,We have an expert-written solution to this problem!
The Smith Manufacturing Company had inventory turnover of 9 for the current year.
What is the days' sales in inventory for the current year?
40.56 days (365/9=)
When inventory costs are rising, a company may prefer to use the __________ method in the
perpetual system in order to pay the lowest amount of taxes.
A. FIFO
B. LIFO
C. Weighted Average
LIFO
We have an expert-written solution to this problem!
Ace Manufacturing purchased merchandise inventory for $8,000. At the end of the accounting
period it has a market value of $7,800.
Using the lower-of-cost-or-market rule, what is the journal entry to record the adjustment?
cost of goods sold debit 200
Merchandise inventory credit 200
Assume the following beginning inventory, purchases, and sales during the month of April:
April 1: Beginning Merchandise Inventory, 10 units @ $15 each
April 3: 7 units sold
April 10: Purchased 9 units at $16
, April 23: 4 units sold
Determine the Cost of Goods Sold using the LIFO inventory costing method and the periodic
inventory system on April 30.
$174
he Tampa Manufacturing Company had the following financial data for December 31, the end of
the current year:
Cost of Goods Sold
$500,000
Beginning Merchandise Inventory
55,000
Ending Merchandise Inventory
45,000
What is the inventory turnover for the year?
10 times per year (500000 /((55000+45000)/2)=)
Inventory turnover measures ________.
how rapidly merchandise inventory is sold
Assume Jones Manufacturing begins January with 10 units of inventory that cost $10 each.
During January, the following purchases and goods sold were:
