Finance Questions

Freight costs incurred by the seller on outgoing merchandise are an operating expense to the seller.

Inventory methods such as FIFO and LIFO deal more with the flow of costs than with the flow of goods

Goods that have been purchased FOB destination but are in transit, should be excluded from a physical count of goods by the buyer.

Sales revenue minus operating expenses equals gross profit.

Consigned goods are held for sale by one party although ownership of the goods is retained by another party.

If the unit price of inventory is increasing during a period, a company using the LIFO inventory method will show lower gross profit for the period than if it had used the FIFO inventory method.

When the cost of inventory is higher than its net realizable value, the inventory is written down to its net realizable value

Goods in transit shipped FOB shipping point should be included in the buyer's ending inventory.

The lower-of-cost-or-net-realizable-value rule implies that it is unacceptable to report inventory at a cost that is in excess of its net realizable value.

The FIFO inventory method results in an ending inventory valued at the most recent cost.

On Dec. 20, X-Mart received a $100 allowance because the merchandise it purchased on account, earlier in the month, was of poor quality. Demonstrate the required journal entry on X-Mart's books for the allowance assuming the perpetual inventory method.

Which of the following ratios is of the most importance in determining the price of a stock on the stock market?A) Current ratioB) Debt-to-equityC) Earnings per shareD) Return on equity

Which of the following is a solvency ratio?A) Current ratioB) Deb-to-equity ratioC) Earnings per shareD) Return on equity ratio

Which of the following is true?A) Total fixed costs vary exactly as the level of production varies.B) Variable costs are fixed per unit.C) The contribution margin per unit varies as the number of units varies.D) Fixed costs are fixed per unit.

Which of the following is considered to be an expense on the income statement?A)Prepaid Expenses.B)Wages payable.C)Notes payable.D)Cost of goods sold.

Last month, Buren, Inc. manufactured 10,000 units of its only product, and the cost per unit was $60. At this level of production, variable costs are 50% of total unit costs. If 10,500 units are manufactured this month and cost behavior patterns remain unchangedA) total variable cost will remain unchanged.B) variable cost per unit will increase.C) fixed costs per unit will increase.D) total cost per unit will decrease.

Which of the following would be considered a period cost for a manufacturing firm?A) The fork life driver's wagesB) The president of the company's salaryC) Depreciation on equipment in the factoryD) Property taxes on the factory

A product sells for $20 per unit and has a contribution margin ratio of 40%. Fixed expenses total $120,000 annually. How many units must be sold to yield an annual net income of $30,000?A) 20,000B) 18,750C) 25,000D) 12,500

Kirtland Company went into business in 2016 when it sold 200 shares of stock for $20 apiece. No more stock has been issued since that time. At December 31, 2025, Kirtland had $16,000 in its retained earnings, and at December 31, 2026, retained earnings was $12,000. Kirtland paid $10,000 in dividends during 2026. What is Kirtland's earnings per share for 2026?A) $300B) $2C) $50D) $30

Daily, Inc. began 2025 with $6,400 in inventory and ended the year with $5,600 in inventory. During 2025, Daily sold $32,000 of its inventory for a total of $69,000. At the end of 2025, Daily still owed $3,500 to its suppliers of inventory. How much was Daily's inventory turnover ratio?A) 5.46B) 5.20C) 5.33D) 5.86