1.In a manufacturing business, inventory that is ready for sale is called*

raw materials

finished goods inventory

work in process inventory

store supplies inventory

2.Beginning inventory plus the cost of goods purchased equals*

cost of goods sold.

net purchases.

cost of goods available for sale.

total goods purchased.

3.Cost of goods sold is computed from the following equation:*

beginning inventory minus costs of goods purchased plus ending inventory.

sales plus gross profit minus ending inventory plus beginning inventory.

sales minus cost of goods purchased plus beginning inventory minus ending inventory.

beginning inventory plus cost of goods purchased minus ending inventory.

4.The LIFO inventory method assumes that the cost of the latest units purchased are*

the least to be allocated to cost of goods sold.

the first to be allocated to cost of goods sold.

the first to be allocated to ending inventory.

not allocated to cost of goods sold or ending inventory.

5.The FIFO inventory method assumes that the cost of the latest units purchased are*

the least to be allocated to cost of goods sold.

the first to be allocated to cost of goods sold.

the first to be allocated to ending inventory.

not allocated to cost of goods sold or ending inventory.

6.The inventory cost flow assumption where the cost of the most recent purchase is matched first against sales revenues is*

FIFO

LIFO

Weighted Average

Moving Average

7.The inventory cost flow assumption where the cost of the most recent purchases are likely to remain in inventory.*

FIFO

LIFO

Weighted Average

Moving Average

8.The account Inventory will appear on the balance sheet as a current asset at an amount that often reflects the __________ of the merchandise on hand.*

Cost

Net Realizable Value

Retail Price

Lower of Cost or Net Realizable Value

9.When merchandise is purchased on account under the perpetual inventory system the debit side of the journal entry is to which account?*

Inventory

Purchases

Cost of Sales

Accounts Payable

10. In a perpetual inventory system, how often is the cost of goods sold recorded?*

For each sale

For each purchase

At the end of the period

At the beginning of the period

11. In a periodic inventory system, how often is the cost of goods sold recorded?*

For each sale

For each purchase

At the end of the period

At the beginning of the period

12. In the periodic inventory accounting system, what is missing from the following formula for calculating cost of goods sold? Cost of goods sold = Opening inventory + ? - Closing inventory*

Purchases

Sales

Sales discount

Purchase discount

13. When an item is sold, using the perpetual accounting system, what is the entry to the inventory account?*

Credit

Debit

Debit or Credit will do

Both Debit and Credit

14. Which cost flow assumptions can the periodic inventory accounting system use?*

FIFO

LIFO

FIFO, LIFO

FIFO, LIFO, Average

15. Inventory that is overstated means that the amount of inventory reported is _____ is actually on hand.*

more than

less than

half what

twice what

16. The conventional retail method produces an ending inventory that approximates*

Lower of average cost and net realizable value

Lower of FIFO cost and net realizable value

Lower of cost and net realizable value

lower of cost and net realizable value

17. The retail inventory method would include which of the following in the calculation of the goods available for sale at both cost and retail?*

Freght in

Prchase return

Mark up

Mark down