1FIFO perpetual inventory system_______.

A.

assigns the most recent costs to cost of goods sold when goods are sold

B.

reports the oldest costs for ending inventory values

C.

does not match the typical physical flow of goods

D.

assigns the most recent costs to ending inventory

2If a company uses a perpetual inventorysystem, it will maintain all the following accounts except_______.

A.

cost of goods sold

B.

purchases

C.

sales

D.

Inventory

3When prices arerising, the ending inventory balance reported on aweighted-average basis is generally_______.

A.

lower than on a FIFO basis

B.

equally likely to be higher or lower on aweighted-average basis as opposed to a FIFO basis

C.

greater than on a FIFO basis

D.

equal to ending inventory reported on a FIFO basis

4When inventory prices arerising, theweighted-average method will generally result in a_______.

A.

lower ending inventory value than FIFO

B.

higherowner's equity balance than FIFO

C.

higher gross margin than FIFO

D.

lower cost of goods sold than FIFO

5 Given the followingdata, what is the cost of goods sold rounded to the nearest whole dollar using periodicFIFO?

Sales revenue

100 units at$10 per unit

Beginning inventory

50 units at$8 per unit

Purchases

90 units at$9 per unit

A.

$890

B.

$360

C.

$400

D.

$850

6An item is considered material if_______.

A.

its inclusion in the financial statements would cause a statement user to change a decision

B.

it facilitates comparison with the financial statements of another company in the same industry

C.

its dollar value is greater than10% of net income

Dit is accounted for using a treatment that is not normally allowed by generally accepted accounting principles

7If a company uses a periodic inventorysystem, which of the following entries is required to record the sale of merchandise oncredit?

A.

Accounts Receivable

Sales Revenue

B.

Cost of Goods Sold

Purchases

C.

Purchases

Cost of Goods Sold

D.

Accounts Payable

Sales Revenue

8If the cost of an item of inventory is$80 and the current selling price is$75, the amount shown in inventory on the balance sheet under thelower-of-cost-and-net realizable-value rule is_______.

A.

$80

B.

$75 or$80

C.

$155

D.

$75

9Given the following data:

Ending inventory at cost $23,600 Ending inventory at net realizable value 24,000 Cost of goods sold (before consideration of thelower-of-cost-and-net-realizable-value rule) 37,00

9 Which of the following depicts the proper account balance

after the application of thelower-of-cost-and-net-realizable-value rule?

A. Cost of goods sold will be $36,600.

B. Ending inventory will be $24,000.

C. Ending inventory will be $23,600.

D. Cost of goods sold will be $57,600.

10If ending inventory for the current accounting period is understated by $4,700, _______.

A. net income for the current period will be overstated by $4,700

B. cost of goods sold for the current period will be overstated by $4,700

C. beginning inventory for the next period will be overstated by $4,700

D. owner's equity at the end of the next accounting period will be understated by $4,700