5:45 5GE 75% ACC 203 - 204 Exa... 2 COST ACCOUNTING ACC 203 2 NAME MULTIPLE CHOICE QUESTIONS (Circle the correct answer) Parti 1. The primary basis for inventory valuation is cost. a) True b) False 2. Under the LIFO method, the inventory shown on the balance sheet is more relevant a) True b) False 3. LIFO is popular in times of rising prices. a) True D) False 4. When perpetual inventory records are maintained, it is not necessary to take a physical count of materials. a) True b) False The cutoff date for including transactions is usually the last day of the accounting period. a) True b) False 5. 6. 7. Which of the following is a major criticism of the LIFO method? a) Current costs are not matched against current revenue. b) It does not five a good measurement of current earnings, c) It reflects old costs. d) It almost always results in higher taxes. Which of the following is a major advantage of the moving average method? a) Current costs are matched against current revenue. b) It gives an exact measurement of current earnings. c) It almost always results in lower taxes. d) il minimizes the influence of price fluctuations. To which account is an inventory shortage normally charged? a) Raw materials control. b) Manufacturing overhead control. c) Work in process - ending. d) Cost of goods sold Under the FIFO method the most recent purchases are assigned to the ending inventory a) True b) False 8. 9