It's all about principle.
Inventory Method
"But at what cost?"
Tryna race, yo?
Misc.
100

A company should report the least favorable figures in the financial statements when two or more options are presented.

Conservatism

100
The inventory costing method that will ALWAYS have a COGS in between FIFO and LIFO if you use the same data.
Weighted Average Method
100

Assume a company began June with 21 units of merch inventory, with a cost of $10 per unit. During June, the company did the following.

June 8: Purchased 18 units @ $11
June 14: Sold 15 units @ $20
June 22: Purchased 20 units @ $15
June 27: Sold 24 units @ $20

What would the COGS be on June 14th if you used FIFO?

$150

100
Formula for Inventory Turnover

COGS/Average Merch Inventory

100

Your ending merchandise inventory is overstated by $3,000 for 2020. What does that mean for your beginning merchandise inventory in 2021. (Overstated or Understated, by how much?)

Overstated by $3,000

200

A company should report enough info for outsiders to make knowledgeable decisions about the company

Disclosure Principle

200

Often time places that sell cars, or other customizable expensive products will use this inventory costing method.

Specific Identification Method

200

Assume a company began June with 21 units of merch inventory, with a cost of $10 per unit. During June, the company did the following.

June 8: Purchased 18 units @ $11
June 14: Sold 15 units @ $20
June 22: Purchased 20 units @ $15
June 27: Sold 24 units @ $20

What would the COGS be on June 14th if you used LIFO?

$165

200

Formula for Days' Sales in Inventory

365/Inventory Turnover

200

What company is the largest employer in USA?

Walmart

300

A company must perform strictly proper accounting only for significant items.

Materiality Concept

300

What is the fastest animal in water?

Sailfish

300

Assume a company began June with 21 units of merch inventory, with a cost of $10 per unit. During June, the company did the following.

June 8: Purchased 18 units @ $11
June 14: Sold 15 units @ $20
June 22: Purchased 20 units @ $15
June 27: Sold 24 units @ $20

What would the total COGS be after June 27th if you used LIFO?

$508

300

What is the name of the MLB team that calls Cleveland their home?

Guardians

300
Your COGS is understated by $2,800. What happens to your Gross Profit and Net Income?

Overstated by $2,800

400

A company should use the same accounting methods and procedures from period to period.

Consistency Principle

400

Which inventory costing method is the ENDING INVENTORY based on the cost of the newest purchases?

LIFO

400

How many people are there on earth? (answer must be within .1 billion)

8.1 billion

400

Using the information below, find the inventory turnover ratio.

COGS: $250,000

Beginning Merch Inv:$23,300

Ending Merch Inv:$26,700

10

400

How many stomachs does a platypus have?

0
500

How many chromosomes are in a human cell?

46 (23 pairs)

500

Which inventory costing method is the COGS based on the cost of the oldest purchases?

FIFO

500

Assume a company began June with 21 units of merch inventory, with a cost of $10 per unit. During June, the company did the following.

June 8: Purchased 18 units @ $11
June 14: Sold 15 units @ $20
June 22: Purchased 20 units @ $15
June 27: Sold 24 units @ $20

What would the total COGS be after June 27th if you used Weighted Average Method?

$457.38 (if you are within 1 dollars, I will give it to you from rounding)

500

Using the information below, find the days sales in inventory.

COGS: $150,000

Beginning Merch Inv:$22,300

Ending Merch Inv:$27,700

60.83 days

500

You have $18,000 in your ending merchandise inventory. On Dec 31st, you could replace your inventory for $16,400. Write the adjusting journal entry.

COGS                             $1,600

        Merch Inventory                $1,600

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