Inventory Flashcards Preview

FAR CPA Custom > Inventory > Flashcards

Flashcards in Inventory Deck (22)
1

What is the basic inventory formula?

BI + Net P = EI + COGS

2

What is the formula for Inventory Turnover Ratio?

ITO = COGS / Avg Inv

3

What is the formula for determining allocated costs?

Total cost x the fraction allocated to the particular asset.

4

Is freight in an inventoriable cost?

Yes

5

Is warehousing an inventoriable cost?

Yes

6

Is freight out an inventoriable cost?

No

7

How do you determine LCM?

First determine market price. (Middle value of NRV (SP-DC), RC, and NRV-GM = MP). Then compare it to cost. LCM is the lower of the market price vs the cost.

8

As dollar value LIFO layers are added, increases at the base year costs are restated using the price index in effect at the time each layer was added. TF

True

9

Dollar value LIFO inventory costs are cumulative. TF

True

10

When progress billings are sent (dealing with construction projects) revenue is credited. TF

False. The contra account to CIP named BCIP is credited.

11

COGS Available for Sale =

BI + Net P

12

In a period of rising prices, which inventory method will result in the highest COGS?

LIFO

13

In a period of rising prices, which inventory method will result in the highest NI?

FIFO, due to creating the lowest COGS.

14

The double extension and chain link methods refer to what inventory cost flow method?

Dollar value LIFO

15

What is the formula for # of days supply in average inventory?

Average Inventory at cost / Average sales per day at Cost

16

Goods held on consignment are included in inventory. TF

False.

17

Goods out on consignment are included in inventory. TF

True.

18

FOB Shipping Point means...

The title transfers to the buyer at the shipping point.

19

FOB Destination means...

The title transfers to the buyer when its item arrives

20

Using the % of completion method, calculation of income for a period is the ___ costs incurred to date / the ____ estimated costs.

Total

21

WA of inventory = Total cost of inventory / Total ____ of inventory.

Units

22

2 Steps to answering a cost to retail ending inventory question?

1. determine the cost to retail CogsA ratio
2. multiple retail ending inventory by the ratio