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ment effects of errors in ed ) in the next. RNOWLEDGE CHECK - UP The following items should be included in merchandise inventory: a .
ment effects of errors in ed in the next.
RNOWLEDGE CHECKUP
The following items should be included in merchandise inventory:
a Goods in transit with sales terms FOB destination
b Additional costs necessary to put inventory in a place and condition for sale
c Goods held by a consignee
d All of the above.
Under both a perpetual and a periodic inventory system goods must be counted at the end of the accounting period for the following reason:
a Items that are damaged or obsolete can be identified through the count
b Merchandise inventory can be adjusted to reflect the actual inventory on hand at the end of the accounting period
c Lost or stolen items can be removed from the balance of inventory
d All of the above.
Costing methods are an important accounting policy choice for the following reasons:
a Once selected, companies must restate financial statements if they decide to change their accounting policy.
b The costing method used in a period of changing unit costs will impact ending inventory balances and cost of goods sold.
c In a period of rising prices, FIFO has a higher per unit cost held in ending inventory.
d All of the above.
Under the firstin firstout inventory costing method:
a Inventory items are assumed to be sold in the order they are acquired.
b Inventory items are assumed to be purchased in the order they are acquired.
c Items in ending inventory do not reflect the most recent purchases.
d Average cost per unit is calculated after each sale of goods.
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