Why might a company estimate ending inventory instead of performing a physical count? O The mathematical estimates can determine if inventory has been lost. O The mathematical estimates are more accurate than 'doing inventory! O The mathematical estimates take less time and are all acceptable under GAAP. O The mathematical estimates result in greater job security for accounting staff. ?)

Why might a company estimate ending inventory instead of performing a physical count? O The mathematical estimates can determine if inventory has been lost. O The mathematical estimates are more accurate than 'doing inventory! O The mathematical estimates take less time and are all acceptable under GAAP. O The mathematical estimates result in greater job security for accounting staff. ?)

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 5MC: Which of the following is a disadvantage of the perpetual inventory system? A. Inventory information...

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Errors in Ending Inventory From time to time, business news will report that the management of a company has misstated its profits by knowingly establishing an incorrect amount for its ending inventory. Required: Explain how a misstatement of ending inventory can affect profit.
Which of the following is a disadvantage of the perpetual inventory system? A. Inventory information is in real-time. B. Inventory is automatically updated. C. It allows managers to make current decisions about purchases, stock, and sales. D. It is cost-prohibitive.
Which of the following is an advantage of the periodic inventory system? A. frequent physical inventory counts B. cost prohibitive C. time consuming D. real-time information for managers
1. What is the major advantage of using a perpetual inventory system? a. It provides efficient internal control over materials. b. It avoids inventory shortages and overages. c. It avoids losses due to theft. d. It minimizes error in posting receipts and issues of materials. 2. If the 300 defective bolts(normal spoilage) were repaired and management wanted to be sure the incremental costs did not exceed the cost of producing new units, how would the rework costs be accounted for: a. Charged to overhead and spread over the costs of all products. b. Expensed as extraordinary. c. Charged to those belts repaired. d. As normal materials, labor and overhead.
Why is the level of and movement in the operating expense percentage an important indicator of financial risk? which answer is it below? a. It provides important insight into management integrity b It is an indicator of production efficiency. c. It reveals the success of the business's Inventory procurement strategies d. It is a measure of expense management, exclusive of production and financing costs. .
6. Lily, a new auditor in an electronics manufacturing company, is reviewing the appropriateness of the minimum quantity level of inventory established by a department. Which of the following would Lily be least likely to consider? Group of answer choices Area/size of the warehouse where the inventories are stored. Stockout costs, including lost customers. The potential for obsolescence of inventory items. Seasonal variations in forecasting inventory demand.
The chairman of the board of directors of the company for which you are chief accountant has told you that he has little use for accounting figures based on cost. He believes that replacement values are of far more significance to the board of directors than “out-of-date costs.” Present some arguments to convince him that accounting data should still be based on cost.
24.Which of the following is not a potential consequence of carrying insufficient inventory to meet the day to day needs of the business? A Breaks in production due to lack of raw materials B Cost savings on ordering inventory at short notice C Loss of customer goodwill D Missed opportunity to make sales
The problem statement here is that in recent months, the cost accounting reports have been somewhat disturbing to management. It seems that some of the finished products are costing more than they should, even to the point of approaching their retail value. It has been noted by the accounting manager that this problem began when the company started buying ore from different parts of the world, some of which require difficult extraction methods. Explain how the company might change its accounting system to reflect the reporting problems better.
Which of the following would not be considered a cost ofquality?a. Lost sales due to bad publicity generated by productfailures.b. The cost of repairing merchandise that was dropped bya forklift in the factory.c. The amount of a bonus paid to the work team producingthe fewest defective units.d. The cost of the external audit.
An accounting intern for a local CPA firm was reviewing the financial statements of a client in the electronics industry. The intern noticed that the client used the FIFO method of determining ending inventory and cost of goods sold. When she asked a colleague why the firm used FIFO instead of LIFO, she was told that the client used FIFO to minimize its income tax liability. This response puzzled the intern because she thought that LIFO would minimize income tax liability. Required: What would you tell the intern to resolve the confusion?
1) If the overtime premium is charge to specific job, it should be debited to: A. General expense account B. Selling expense account C. Work in process account D. Manufacturing overhead account 2) Wages in excess of the regular rate paid for work after normal closing time is: A. Overtime premium B. Vacation and holiday pay C. Regular wage D. Pension pay 3)What is the major advantage of using a perpetual inventory system? A. It provides efficient internal control over materials. B. It avoids inventory shortages and overages. C. It avoids losses due to theft. D. It minimizes error in posting receipts and issues of materials.