Multiple Choice Questions:

1. Under a perpetual inventory system, the amount of each type of merchandise on hand is available in the

a. customer's ledger

b. creditor's ledger

c. inventory ledger

d. merchandise inventory account

2. The two most widely used methods for determining the cost of inventory are

a. FIFO and LIFO

b. FIFO and average

c. LIFO and average

d. gross profit and average

3. Which of the following companies would be more likely to use the specific identification inventory costing method?

a. Gordon’ s Jewelers

b. Lowe’ s

c. Best Buy

d. Wal-Mart

4. When comparing a retail business to a service business, the financial statement that changes the least is the

a. Balance Sheet

b. Income Statement

c. Retained Earnings Statement

d. Statement of Cash Flow