1) Under the specific-identification method, the physical flow of goods through the business will: A) have no relationship to the flow of costs through the accounting records. B) closely match the flow of costs through the accountivg records. C) exactly match the flow of costs through the accounting records. D) does not apply to this scenario 2) Goods such as milk, bread, and cheese need to be sold quickly due to potential spoilage. Therefore, they would probably be costed using the: A) any method as the physical flow and the cost flow are different. B) FIFO method of inventory costing. C) average cost method of inventory costing. D) LIFO method of inventory costing. 3) Equipment sold is shown on the A) Balance Sheet as an asset. B) Income Statement before gross profit. C) Statement of Retained Earnings. D) Income Statement after gross profit. 4) A change from one costing method of inventory to another inventory costing method from one year to the next could be viewed as a violation of which accounting concept or principle? A) Conservatism C) Materiality B) Entity D) Consistency 5) One lot of merchandise was counted at $122.87. A second count of the same merchandise showed $122.00. The difference could be ignored due to: A) materiality. C) conservatism. B) consistency. D) it should not be ignored. 6) Which concept or principle of accounting do footnotes support? A) entity C) materiality B) full disclosure D) conservatism 7) Beginning inventory + Net purchases - A) Cost of goods sold. B) Cost of goods available for sale. C) Gross profit. D) Ending inventory. 8) Cost of Goods Sold is often one of the largest: A) expenses on the Income Statement B) long-term assets on the Balance Sheet. C) current assets on the Balance Sheet. D) part of general selling expenses. 9) For accounting information to be useful it must be all of the following EXCEPT: A) reliable. C) relevant B) understandable. D) economical 10) What agency writes U.S. GAAP? A) IRS. C) FASB. B) SEC. D) IASB. 11) What procedure is used to ensure financial reports abide to GAAP principles? A) an examination. C) a review. B) an audit D) a confirmation 12) Which of the following would NOT be considered part of the cost of a new long-term asset? A) Repairs and maintenance after start-up B) Packaging for delivery C) Repairs and maintenance after the asset is in operation D) Transportation and insurance costs to get the asset to the purchaser 13) What is the best method for depreciating items a vehicle? A) straight-line method. B) single-declining balance method. C) units-of-production method. D) double-declining method. 14) Which of the following statements is correct regarding adjustments? a) Adjustments are optional All adjustments are made at the beginning of the accounting b) period Adjustments will correctly allocate cash to revenue or c) expenses d) Adjustments update assets, liabilities and owner's equity 15) Crediting income statement balances is part of the closing entry to: a) close revenue accounts for the year b) transfer revenue balances to cash c) close expense accounts for the year d) close the drawings account for the year 16) After posting the closing entries, a company must prepare a[n]: posting trial a) balance b) post-closing trial balance c) unadjusted trial balance adjusted trial d) balance 17) Which of the following is not an example of an operating expense? Cost of Goods a) Sold Insurance b) Expense c) Rent Expense d) Salaries Expense 18) The two systems of measuring inventory are: a) periodic and episodic b) perpetual and periodic CC FIFO and Weighted average dc control account and sub-ledger
