Goods on consignment belong to the

A	consignor.

B

customer.

C	consignee.

D

supplier.

The first-in, first-out (FIFO) cost formula assumes:

A	the newest goods purchased are the first ones sold.

B	the oldest goods purchased will remain in inventory longest.

C	the oldest goods purchased are the last ones sold.

D	the oldest goods purchased are the first ones sold.

When using first-in, first-out (FIFO):

A	management uses average costs to assign to the balance sheet and the income statement.

B	identical costs go to the balance sheet and the income statement.

C	older costs go to the income statement; newer costs go to the balance sheet.

D	older costs go to the balance sheet; newer costs go to the income statement.

A company purchases 20 units of Product X for $10 each and then 30 units for $12 each. The company then sells 25 units of Product X at a $20 selling price per unit. Assuming the company uses the FIFO cost formula, cost of goods sold is:

A

$260.

B

$300.

C

$200.

D $250.

A company purchases 30 units of Product Q for $10 each and then 20 units for $15 each. The company then sells 20 units of Product Q at a $30 selling price per unit. Assuming the company uses the FIFO cost formula, ending inventory is:

A

$360.

B

$300.

C

$400.

D $300.

A company purchases 20 units of Product Y for $10 each and then 30 units for $12 each. Assuming the company uses the weighted average cost formula, the weighted average unit cost after the second purchase is

A

$11.00.

B

$12.00.

C

$11.20.

D $10.00.

Barnes Software purchases 10 units of microchips for $10, 50 units for $15 each, and 20 units for $20 each on March 1, 13, and 20, respectively. Assuming the company uses the weighted average cost formula under a perpetual system, if Barnes sells 25 microchips on March 18 what is the cost of goods sold on this sale?

A

$475.00

B

$390.75

C

$354.25

D $325.00

Which of the following inventory cost flow assumptions is not acceptable for Canadian GAAP?

A	Specific identification.

B	All of these answers are acceptable.

C	Weighted-average method.

D FIFO.

Assuming falling inventory prices, which inventory cost flow assumption results in reporting the higher net income?

A

FIFO.

B	Specific identification.

C	Weighted average.

D None of these.

If the ending inventory is overstated

A	assets will be understated and owners equity will be overstated.

B	assets will be overstated and owners equity will be understated.

C	assets will be overstated and owners equity will be overstated.

D assets will be understated and owners equity will be understated.

If the ending inventory for Year 1 was understated by $400, cost of goods sold in Year 2 will be

A

correct.

B	understated by $400.

C	understated by $800.

D overstated by $400.

Net realizable value is:

A	calculated for inventory in total.

B	the historical cost.

C	the selling price less any costs required to make the goods ready for sale.

D the current replacement value.

When the net realizable value of inventory is lower than its cost, the required journal entry will include a:

A	credit to cost of goods sold.

B	debit to cost of goods sold.

C	debit to merchandise inventory.

D	credit to cash.