MBA 6020- Financial and Managerial Accounting 6e Easton, Halsey, McAnally (Test Bank,
100- Verified)
What are the four general types of Inventory - (answer)Merchandise Inventory, Raw Materials, Work in
progress, Finished goods
Merchandise inventory - (answer)has 2 characteristics: 1) It is in a form ready for sale to customers. 2) It
is owned by the company.
Raw Materials - (answer)consist of the basic parts that will be used in production but have not yet been
placed into production
Work in Process - (answer)is the portion of inventory that has been placed into the production process
but is not yet complete
Finished goods - (answer)are items that have been completed and are ready for sale
Regardless of the type of inventory. Merchandise, raw materials, work in process, or finished goods,
companies report all inventories under__________ on the balance sheet - (answer)Current assests
First-In, First-Out (FIFO) method - (answer)assumes that the earliest goods purchased (first in) are the
first goods sold (first out).
Under _________ ending inventory consists of of the most recent purchases - (answer)FIFO
Specific identification method - (answer)Identifies the cost of each particular unit sold and those still
remaining in ending inventory.
Last-in, First-out (LIFO) method - (answer)assumes that the last goods purchased (last in) are the first
goods sold (first out)
Under ________ ending inventory consists of the first goods purchases - (answer)LIFO
100- Verified)
What are the four general types of Inventory - (answer)Merchandise Inventory, Raw Materials, Work in
progress, Finished goods
Merchandise inventory - (answer)has 2 characteristics: 1) It is in a form ready for sale to customers. 2) It
is owned by the company.
Raw Materials - (answer)consist of the basic parts that will be used in production but have not yet been
placed into production
Work in Process - (answer)is the portion of inventory that has been placed into the production process
but is not yet complete
Finished goods - (answer)are items that have been completed and are ready for sale
Regardless of the type of inventory. Merchandise, raw materials, work in process, or finished goods,
companies report all inventories under__________ on the balance sheet - (answer)Current assests
First-In, First-Out (FIFO) method - (answer)assumes that the earliest goods purchased (first in) are the
first goods sold (first out).
Under _________ ending inventory consists of of the most recent purchases - (answer)FIFO
Specific identification method - (answer)Identifies the cost of each particular unit sold and those still
remaining in ending inventory.
Last-in, First-out (LIFO) method - (answer)assumes that the last goods purchased (last in) are the first
goods sold (first out)
Under ________ ending inventory consists of the first goods purchases - (answer)LIFO
