MCQ 1. When inventory is shipped to the customer F.O.B shipping a. the customer owns the inventory when received b. the customer owns the inventory when ordered c. the customer owns the inventory when shipped d. the customer does not own the inventory in transit 2. Cost of goods sold is a. the cost of making product b. the cost of making or purchasing inventory sold this period c. the cost of delivering goods to customers d. the cost of selling goods to customers 3. Which of the following formulas is the correct computation of cost of goods sold? a. beginning inventory less purchases less ending inventory b. ending inventory plus purchases less beginning inventory c. gross profit plus purchases less ending inventory d. beginning inventory plus purchases less ending inventory 4. Inventory that appreciates in value is reported on the balance sheet at a. historical cost b. lower of cost or market c. either a. \& b d. fair market value or replacement cost 5. When the same inventory items are purchased at different costs per item a. FASB gives you a choice of FIFO, LIFO or Weighted average b. cost is easy to determine and no method is required c. the highest cost is used for inventory for conservatism d. the lowest cost is used for inventory for conservatism