Question as attatched

1) The LIFO inventory cost flow method may be applied to which of the following inventory systems? Periodic Perpetual A B C Yes Yes No No No Ye s D Ye No s 2) Which of the following is true regarding interim financial reporting? A Both IFRS and U.S. GAAP view each interim period as an integral part of the annual period to which it relates. Each interim period is viewed as a discrete reporting period under IFRS and as an integral part of an annual B period under U.S. GAAP. C Both IFRS and U.S. GAAP view each interim period as a discrete reporting period. Each interim period is viewed as a discrete reporting period under U.S. GAAP and as an integral part of an D annual period under IFRS. 3) What is the appropriate treatment for goods held on consignment? A B C D The goods should be included in cost of goods sold of the consignee only when sold. The goods should be included in ending inventory of the consignor. The goods should be included in cost of goods sold of the consignor when transferred to the consignee. The goods should be included in ending inventory of the consignee. 4) An inventory is measured in the annual financial statements at the of cost or . List A List B A B Lower Market Higher Net realizable value (NRV) C Higher Fair value D Lower Fair value minus costs to sell 5) Which of the following statements is correct regarding the writedown of inventory in the annual financial statements? The writedown of inventory is recognized as a loss in the income statement, and this loss must not be A reversed. The writedown of inventory is recognized as a gain in the income statement, and its reversal is permitted in the B subsequent periods. C The writedown of inventory is recognized directly in retained earnings, and its reversal is prohibited. The writedown of inventory is recognized as an item of other comprehensive income and reclassified to the D income statement when the inventory is sold. 6) The following data apply to a unit of inventory: Selling price $22 Selling cost 2 Normal profit margin 5 Replacement cost 10 Using the lowerofcostormarket (LCM) method of measuring inventory, what is the market amount for this unit of inventory? A B C D $17.50 $15.00 $20.00 $10.00 7) According to IFRS, a writedown of inventory is recognized in and reversed in subsequent periods. List A List B A Profit or May be loss B C Profit or loss Must not be Other comprehensive Must not be income D Directly in eq May be uity 8) Entity A uses the perpetual inventory accounting system. On May 1, Year 1, Entity A sold on credit inventory with cost of $1,500 for $2,500. How should Entity A record this transaction on May 1, Year 1? A Trade receivables $2,500 Cost of goods sold 1,500 Sales B $4,000 $2,500 Inventory Trade receivables $2,500 $1,000 Inventory 1,500 Trade receivables $2,500 Sales 9) Cost of goods sold Sales D $2,500 Sales C Trade receivables $2,500 Which of the following assets are not classified as inventories in the financial statements of a manufacturer? A B C D 10) Assets used to manufacture goods. Assets in the form of materials to be consumed in the production of goods. Assets in the process of production for sale in the ordinary course of business. Assets held for sale in the ordinary course of business. The inventory method yielding the same inventory measurement and cost of goods sold whether a perpetual or periodic system is used is A B C D Firstin, firstout. Average cost. Lastin, firstout. Either firstin, firstout or lastin, firstout. 11) A company determined the following information for its inventory at the end of the fiscal year: Historical cost Selling price Cost of disposal Cost of completion Normal profit margin $100,000 140,000 10,000 5,000 17,000 What is the net realizable value of the inventory at year end? A B C D 12) $125,000 $130,000 $135,000 $108,000 Which inventory costing method would a company that wishes to maximize profits in a period of rising prices use? A B C D FIFO. LIFO. Movingaverage. Weightedaverage. 13) Which of the following should not be included in Entity A's December 31, Year 1, inventory physical count? A B C D Goods shipped FOB destination from a vendor during Year 1 and received by Entity A during Year 2. Goods out on consignment. Goods billed to the customer FOB destination during Year 1 and received by the customer during Year 2. Goods shipped FOB shipping point from a vendor during Year 1 and received by Entity A during Year 2. 14) Manufacturing overhead costs are normally fully recognized as an inventory cost. However, in periods of abnormally high production, the amount of allocated to each unit of production is . List A List B A Fixed Increased overheads B Variable Increased C Fixed Not changed overheads D Fixed Decreased overheads 15) The following information pertains to Entity A's financial accounting results for the first quarter (Q1) of Year 1: Sales $10,000 Purchases 6,000 Beginning inventory 7,000 Estimated gross profit margin 20% A physical count of inventory at the end of Q1 is not feasible. What amount of inventory will be reported in the Q1 interim financial statements using the gross profit method? A B C D 16) $13,000 $8,000 $2,000 $5,000 How is the perunit cost of inventory for the period calculated in accordance with the weightedaverage method? A B C Cost of period ending units divided by number of period ending units. Cost of period beginning units divided by number of period beginning units. Cost of purchases during the period divided by number of units purchased during the period. Cost of units available for sale during the period divided by the number of units available for sale during the D period. 17) How should the following costs affect a retailer's inventory? Interest on FreightIn Inventory Loan A B C D 18) Increase Increase No effect Increase No effect No effect Increase No Effect The replacement cost of an inventory item is below the net realizable value and above the net realizable value less a normal profit margin. The inventory item's original cost is above the net realizable value. Under the lower of cost or market (LCM) method, the inventory item should be valued at A B C D 19) Net realizable value. Replacement cost. Original cost. Net realizable value less normal profit margin. The following costs pertain to Entity A's purchase of inventory: 700 units of Product A Freightin Insurance cost during transit of purchased goods Cost of materials and labor incurred to bring Product A to salable condition Total What amount should Entity A record as the cost of inventory as a result of this purchase? A B C D $4,825 $3,925 $4,925 $4,650 20) A material overstatement in the physical count of ending inventory was discovered after the year end financial statements of a company were issued to the public. What effect did this error have on the yearend financial statements? Current Assets Gross Profit A B C D Overstated Overstated Understated Understated Overstated Understated Understated Overstated 1) The LIFO inventory cost flow method may be applied to which of the following inventory systems? Periodic Perpetual A B C D 2) 3) 4) Which of the following is true regarding interim financial reporting? A Both IFRS and U.S. GAAP view each interim period as an integral part of the annual period to which it relates. B Each interim period is viewed as a discrete reporting period under IFRS and as an integral part of an annual period under U.S. GAAP. C Both IFRS and U.S. GAAP view each interim period as a discrete reporting period. D Each interim period is viewed as a discrete reporting period under U.S. annual period under IFRS. What is the appropriate treatment for goods held on consignment? A The goods should be included in cost of goods sold of the consignee only when sold. B The goods should be included in ending inventory of the consignor. C The goods should be included in cost of goods sold of the consignor when transferred to the consignee. D The goods should be included in ending inventory of the consignee. An inventory is measured in the annual financial statements at the of cost or . List A List B A B C D 5) Which of the following statements is correct annual financial statements? A The writedown of inventory is recognized as a loss in the income statement, and this loss must not be reversed. B The writedown of inventory is recognized as a gain in the income statement, and its reversal is permitted in the subsequent periods. C The writedown of inventory is recognized directly in retained earnings, and its reversal is prohibited. D The writedown of inventory is recognized as an item of other comprehensive income and reclassified to the income statement when the inventory is sold. 6) A $17.50 B $15.00 C $20.00 D $10.00 7) According to IFRS, a writedown of inventory is recognized in and reversed in subsequent periods. List A A B C D 8) Entity A uses the perpetual inventory accounting system. On May 1, Year 1, Entity A sold on credit inventory with cost of $1,500 for $2,500. How should Entity A record this transaction on May 1, Year 1? A B C D 9) Which of the following assets are not classified as inventories in the financial statements of a manufacturer? A Assets used to manufacture goods. B Assets in the form of materials to be consumed in the production of goods. C Assets in the process of production for sale in the ordinary course of business. D Assets held for sale in the ordinary course of business. 10) The inventory method yielding the same inventory measurement and cost of goods sold whether a perpetual or periodic system is used is A Firstin, firstout. B Average cost. C Lastin, firstout. D Either firstin, firstout or lastin, firstout. 11) A $125,000 B $130,000 C $135,000 D $108,000 12) Which inventory costing method would a company that wishes to maximize profits in a period of rising prices use? A FIFO. B LIFO. C Movingaverage. D Weightedaverage. 13) Which of the following should not be included in Entity A's December 31, Year 1, inventory physical count? A Goods shipped FOB destination from a vendor during Year 1 and received by Entity A during Year 2. B Goods out on consignment. C Goods billed to the customer FOB destination during Year 1 and received by the customer during Year 2. D Goods shipped FOB shipping point from a vendor during Year 1 and received by Entity A during Year 2. 14) Manufacturing overhead costs are normally fully recognized as an inventory cost. However, in periods of abnormally high production, the amount of . List A A B C D 15) A $13,000 B $8,000 C $2,000 D $5,000 16) How is the perunit cost of inventory for the period calculated in accordance with the weightedaverage method? A Cost of period ending units divided by number of period ending units. B Cost of period beginning units divided by number of period beginning units. C Cost of purchases during the period divided by number of units purchased during the period. D Cost of units available for sale during the period divided by the number of units available for sale during the period. 17) How should the following costs affect a retailer's inventory? FreightIn Interest on Inventory Loan A B C D 18) The replacement cost of an inventory item is below the net realizable value and above the net realizable value less a normal profit margin. The inventory item's original cost is above the net realizable value. Under the lower of cost or market (LCM) method, the inventory item should be valued at A Net realizable value. B Replacement cost. C Original cost. D Net realizable value less normal profit margin. 19) A $4,825 B $3,925 C $4,925 D $4,650 20) A material overstatement in the physical count of ending inventory was discovered after the yearend financial statements of a company were issued to the public. What effect did this error have on the yearend financial statements? Current Assets Gross Profit A B C D 1) The LIFO inventory cost flow method may be applied to which of the following inventory systems? Periodic Perpetual A B C D 2) 3) 4) Which of the following is true regarding interim financial reporting? A Both IFRS and U.S. GAAP view each interim period as an integral part of the annual period to which it relates. B Each interim period is viewed as a discrete reporting period under IFRS and as an integral part of an annual period under U.S. GAAP. C Both IFRS and U.S. GAAP view each interim period as a discrete reporting period. D Each interim period is viewed as a discrete reporting period under U.S. annual period under IFRS. What is the appropriate treatment for goods held on consignment? A The goods should be included in cost of goods sold of the consignee only when sold. B The goods should be included in ending inventory of the consignor. C The goods should be included in cost of goods sold of the consignor when transferred to the consignee. D The goods should be included in ending inventory of the consignee. An inventory is measured in the annual financial statements at the of cost or . List A List B A B C D 5) Which of the following statements is correct annual financial statements? A The writedown of inventory is recognized as a loss in the income statement, and this loss must not be reversed. B The writedown of inventory is recognized as a gain in the income statement, and its reversal is permitted in the subsequent periods. C The writedown of inventory is recognized directly in retained earnings, and its reversal is prohibited. D The writedown of inventory is recognized as an item of other comprehensive income and reclassified to the income statement when the inventory is sold. 6) A $17.50 B $15.00 C $20.00 D $10.00 7) According to IFRS, a writedown of inventory is recognized in and reversed in subsequent periods. List A A B C D 8) Entity A uses the perpetual inventory accounting system. On May 1, Year 1, Entity A sold on credit inventory with cost of $1,500 for $2,500. How should Entity A record this transaction on May 1, Year 1? A B C D 9) Which of the following assets are not classified as inventories in the financial statements of a manufacturer? A Assets used to manufacture goods. B Assets in the form of materials to be consumed in the production of goods. C Assets in the process of production for sale in the ordinary course of business. D Assets held for sale in the ordinary course of business. 10) The inventory method yielding the same inventory measurement and cost of goods sold whether a perpetual or periodic system is used is A Firstin, firstout. B Average cost. C Lastin, firstout. D Either firstin, firstout or lastin, firstout. 11) A $125,000 B $130,000 C $135,000 D $108,000 12) Which inventory costing method would a company that wishes to maximize profits in a period of rising prices use? A FIFO. B LIFO. C Movingaverage. D Weightedaverage. 13) Which of the following should not be included in Entity A's December 31, Year 1, inventory physical count? A Goods shipped FOB destination from a vendor during Year 1 and received by Entity A during Year 2. B Goods out on consignment. C Goods billed to the customer FOB destination during Year 1 and received by the customer during Year 2. D Goods shipped FOB shipping point from a vendor during Year 1 and received by Entity A during Year 2. 14) Manufacturing overhead costs are normally fully recognized as an inventory cost. However, in periods of abnormally high production, the amount of . List A A B C D 15) A $13,000 B $8,000 C $2,000 D $5,000 16) How is the perunit cost of inventory for the period calculated in accordance with the weightedaverage method? A Cost of period ending units divided by number of period ending units. B Cost of period beginning units divided by number of period beginning units. C Cost of purchases during the period divided by number of units purchased during the period. D Cost of units available for sale during the period divided by the number of units available for sale during the period. 17) How should the following costs affect a retailer's inventory? FreightIn Interest on Inventory Loan A B C D 18) The replacement cost of an inventory item is below the net realizable value and above the net realizable value less a normal profit margin. The inventory item's original cost is above the net realizable value. Under the lower of cost or market (LCM) method, the inventory item should be valued at A Net realizable value. B Replacement cost. C Original cost. D Net realizable value less normal profit margin. 19) A $4,825 B $3,925 C $4,925 D $4,650 20) A material overstatement in the physical count of ending inventory was discovered after the yearend financial statements of a company were issued to the public. What effect did this error have on the yearend financial statements? Current Assets Gross Profit A B C D