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CPA Exam > Inventory > Flashcards

Flashcards in Inventory Deck (23):
1

Purchases - Net of Discounts, Freight, Warehouse expenditures

Inventory

2

FOB Shipping Point puts the inventory into the hands of the buyer from the loading dock

Inventory

3

FOB Destination keeps the items in the seller's inventory until it reaches the buyer

Inventory

4

Sales Commissions

Interest on liabilities to vendors

Shipping expense to customers

Inventory

5

Under the gross method, discounts are recorded only when used.

Inventory

6

Under the net method, discounts are recorded whether used or not.

Unused discounts are allocated to financing expense.

Inventory

7

Gross Margin : Sales - COGS (BI + P - EI)

Inventory

8

Inventory is counted at certain times throughout the period

Weighted-average cost flow method is used.

Inventory

9

Inventory count continually updated

Uses a moving-average cost flow method

Inventory

10

Under the FIFO system, periodic and perpetual inventory methods will both have the same ending inventory.

Inventory

11

COGS / Average Inventory

Inventory

12

365 / Inventory Turnover

Inventory

13

The CONSIGNOR holds the consigned items in their inventory count. The cost includes the shipping to the consignee.

Inventory

14

No. Consignment goods are maintained in the inventory of the consignor, not the consignee.

Inventory

15

Misstatement of beginning inventory does NOT have an effect on ending retained earnings.

Misstatement of ENDING inventory does have an effect on retained earnings.

Inventory

16

EI Over : COGS Under : ERE Over

EI Under : COGS Over : ERE Under

Inventory

17

The first (oldest) inventory you have in stock is the first inventory you record for COGS purposes. If your oldest inventory on the shelf cost you $1 when you bought it, COGS is $1

This is just for inventory pricing. It has nothing to do with physically selling the oldest item on the shelf - It is purely for accounting purposes

Inventory

18

The last (newest) inventory you have in stock is the first inventory you record for COGS purposes. If your newest inventory on the shelf cost you $1.50 when you bought it, COGS is $1.50

Inventory

19

COGAS / Total Units : Weighted Average Cost Per Unit

Inventory

20

FIFO's relationship to COGS will be opposite LIFO's relationship to COGS in periods of falling/rising prices.

Inventory

21

FIFO has the Lowest COGS

FIFO is a cat that sees a mouse starts Low and is Rising

If COGS is Low, that means EI is High

Inventory

22

FIFO has the Highest COGS

Remember: FIFO, that silly cat, got High from Catnip and is Falling off the couch

If COGS is High, that means EI is Low

Inventory

23

Market Ceiling : Net Realizable Value : Selling Price - Selling Costs

Market : Replacement Cost

Market Floor : Net Realizable Value - Normal Profit

Inventory