21 of 35

A company has $4,500 in net sales, $3,200 in gross profit, $1,300 in ending inventory, and $1,800 in beginning inventory. The company's cost of goods sold is

	$1,300.
	$1,400.
	$3,200.
	$2,700.

Question

22 of 35

When a merchandiser sells on account, which of the following accounts is NOT needed to record the transaction?

	Accounts Receivable
	Cost of Goods Sold
	Inventory
	Cash

Question

23 of 35

A company has net sales of $223,000, cost of goods sold $85,000, operating expenses of $54,000, and other expenses of $6,000. The company's operating income is

	$84,000.
	$132,000.
	$31,000.
	$78,000.

Question

24 of 35

In order to pay the least income tax possible in periods of decreasing inventory costs, the company should use which of the following inventory costing methods?

	FIFO
	Average cost
	LIFO
	Specific identification

Question

25 of 35

Transferring title refers to a

	change of buyer.
	change of ownership.
	change of seller.
	legal document.

Question

26 of 35

Costs of Goods Sold includes which of the following?

	Depreciation Expense
	The actual cost of the item
	Management salaries
	Administrative fees

Question

27 of 35

Underestimating inventory would be an example of

	conservatism.
	entity.
	consistency.
	materiality.

Question

28 of 35

Inventory for a merchandising business is classified as a(n):

	asset.
	liability.
	revenue.
	part of Stockholders' Equity.

Question

29 of 35

Given the following inventory activity, what is ending inventory using the perpetual LIFO costing method?

Date		Quantity	Unit Cost
Beginning Balance		100	$5.50
September 17	Purchase	50	$3.50
September 17	Sale	25
September 29	Purchases	40	$6

	125 units @ $4.50 and 40 units @ $6.00
	165 units @ $4.86
	75 units @ $5.00 and 50 units @ $3.50 and 40 units @ $6.00
	100 units @ $5.00 and 25 units @ $3.50 and 40 units @ $6.00

Question

30 of 35

One lot of merchandise was counted at $566.34. A second count of the same merchandise showed $566.82. The difference could be ignored due to

	consistency.
	entity.
	materiality.
	conservatism.

Question

31 of 35

In terms of valuation, U.S. GAAP generally uses ________, while IFRS generally uses ________.

	market values, historical values
	historical values, market values
	market values, market values
	historical values, historical values

Question

32 of 35

Using IFRS, book value typically ________ market value.

	is higher than
	bears no relationship to
	is closer to
	is lower than

Question

33 of 35

For accounting information to be useful it must be all of the following EXCEPT

	relevant.
	understandable.
	economical.
	reliable.

Question

34 of 35

Which factor would make a person feel forced to steal money because of high medical bills?

	Realization
	Perceived opportunity
	Rationalization
	Perceived pressure

Question

35 of 35

The process CPAs use to confirm that financial reports conform to GAAP is known as a(n)

	confirmation.
	audit.
	examination.
	review.