1) Assuming that the costs of inventory aredeclining, which cost flow method would give thelargestcost of goods soldamount?

LIFO

All other answers would give the same amount

Average cost

FIFO

2) Which subsequent machinery expenditure should becapitalizedrather than expensed?

A replacement motor on the machinery that increases production

A repair that preserves the machinery's normal condition

None of the other answers should be capitalized

Yearly maintenance on the machinery that keeps the same level of benefits

3) A company has a nonmonetary exchange transaction trading in an old truck and giving some cash for a new truck. If the transaction results in alosson disposal of trucks, thefull amount of the lossshould be recorded under which "conditions?"

Question options:

The transaction lacks commercial substance only

The full loss amount should not be recorded under any substance

The transaction has commercial substance only

The transaction either has or lacks commercial substance

4) A company purchases equipment with a list price of $84,000. The company also pays $7,000 for freight charges to ship the equipment and $2,000 for equipment installation. What amount should the company debit to theequipmentaccount?

Question options:

$86,000

$93,000

$84,000

$91,000

5) A company usingLCNRVdetermines that their ending inventory has a total cost of $284,000, but a total NRV of $291,000. What adjusting journal entry should be recorded if the company uses thecost of goods sold methodfor the entry?

Question options:

Dr. Cost of goods sold $7,000; Cr. Loss due to decline in inventory $7,000

Dr. Cost of goods sold $7,000; Cr. Allowance to reduce inventory $7,000

No entry

Dr. Cost of goods sold $7,000; Cr. Inventory $7,000

6) Company A purchases inventory from Company B. By December 31, this inventory shipment is "in-transit" with a third-party carrier. If the shipping terms areFOB shipping point, who would own the inventory and be able to recognize inventory on their December 31 books?

Question options:

Company A

Company B

No party would own the inventory

The third-party carrier