1.Goods in transit shipped

FOB shipping point should be included in the buyers ending inventory.

FOB shipping point should not be included in the buyers ending inventory.

FOB destination should not be excluded from the buyers ending inventory.

FOB destination should not be included in the sellers ending inventory.

2.An error

that understates the ending inventory will cause the cost of goods sold for the period to be understated.

in the ending inventory of the current period will have no effect on net income of the next accounting period.

that understates the ending inventory will cause net income for the period to be overstated.

that understates the ending inventory will cause assets to be understated.

3.Wholesome Ltd. has a days in inventory ratio of 50 and average inventory of $320,000. What is its cost of goods sold?

cannot be determined

$16,000,000

$2,191,780

$2,336,000

4.the managers of Winning Ways Ltd. receive performance bonuses based on the companys net income. Which inventory cost formula are they likely to favour in periods of declining prices?

Average cost.

FIFO.

Need more information to answer.

They would have no preference.

5.

Which one of the following statements is true?

Depreciation is a valuation concept; that is, we allocate costs to reflect the actual change in the value of the asset.

The adjusting entry for unearned revenues results in an increase to a liability account and a decrease to a revenue account.

Expiration of one month of an insurance policy paid in advance, initially recorded by debiting Prepaid Insurance, results in an adjusting entry that reduces the company's liabilities.

Adjusting entries never affect cash.

None of the above is true.

6.Under a perpetual inventory system

there is no need for a year-end physical count.

the account Purchase Returns and Allowances is credited when goods are returned to vendors.

increases in inventory resulting from purchases are debited to Purchases.

accounting records continuously disclose the amount of inventory.