Subject Answers to attached questions QUESTION 1 A method of valuing inventory based on the assumption that the oldest goods will be sold first is called the A LIFO method B specific cost method C FIFO method D average cost method 2 points QUESTION 2 The inventory system that uses the merchandise inventory account as an active account is called the A perpetual system B LIFO system C FIFO system D periodic system 2 points QUESTION 3 The entry to record a purchase of merchandise on credit using a perpetual inventory system is A statement of retained earnings B Debit Cost of Goods Sold and credit Accounts Payable C Credit Merchandise Inventory and debit Accounts Payable D Debit Merchandise Inventory and credit Accounts Payable 2 points QUESTION 4 A firm that sells a single product had a beginning inventory of 5,000 units with a total cost of $20,000 Early in the year, 8,000 units were purchased at $6 each Using LIFO, what is the value of the ending inventory of 2,000 units A $12,000 B $8,000 C $24,000 D $10,000 2 points QUESTION 5 Cost of goods sold is shown on the A balance sheet as an asset B income statement after gross profit C income statement before gross profit D statement of retained earnings 2 points QUESTION 6 Under the FIFO method, the flow of goods through the accounting records will A have no relationship to the physical flow of goods through the business B exactly match the physical flow of goods through the business C closely match the physical flow of goods through the business D be the opposite of the physical flow of goods through the business 2 points QUESTION 7 Assigning LCM to the items that make up the inventory of merchandise at the end of the accounting period is an application of which of the following concepts A Materiality B Full disclosure C Conservatism D Reliability 2 points QUESTION 8 Ignoring a write off of inventory that will not affect the financial statements to users of the information is an example of A consistency B conservatism C materiality D entity 2 points QUESTION 9 Goods such as milk, bread, and cheese would probably be costed using the A Goods can be costed using FIFO, LIFO, Avg , or Specific Identification B LIFO method of inventory costing C FIFO method of inventory costing D average method of inventory costing 2 points QUESTION 10 If Period 1 ending inventory is understated, then A cost of goods sold is overstated and net income is understated in Period 1 B both cost of goods sold and net income are overstated in Period 1 C cost of goods sold is understated and net income is overstated in Period 1 D both cost of goods sold and net income are understated in Period 1 2 points QUESTION 11 A drawback to using when inventory costs are rising is that the company reports lower net income A average costing B LIFO C specific identification costing D FIFO 2 points QUESTION 12 Under the average cost method, the flow of goods through the accounting records will A have no relationship to the physical flow of goods through the business B exactly match the physical flow of goods through the business C be the opposite of the physical flow of goods through the business D closely match the physical flow of goods through the business 2 points QUESTION 13 A company has $8,200 in net sales, $1,100 in gross profit, $2,500 in ending inventory and $2,000 in beginning inventory The company s cost of goods sold is A $6,200 B $5,600 C $5,700 D $7,100 2 points QUESTION 14 produces the lowest cost of goods sold and the highest gross profit when prices are increasing A Average cost B FIFO C LIFO D Specific identification 2 points QUESTION 15 A physical count of the inventory is taken when using which inventory system A Both perpetual and periodic inventory system B Perpetual inventory system C Neither perpetual or periodic inventory system D Periodic inventory system 2 points QUESTION 16 Net sales minus estimated gross profit yields the estimated A gross profit B ending inventory C beginning inventory D cost of goods sold 2 points QUESTION 17 Under the LIFO method, the flow of goods through the accounting records will A be nearly the opposite of the physical flow of goods through the business B exactly match the physical flow of goods through the business C closely match the physical flow of goods through the business D have no relationship to the physical flow of goods through the business 2 points QUESTION 18 An error in the reported inventory will cause errors in all of the following EXCEPT the A statement of retained earnings B balance sheet C following year s financial statements D cash account 2 points QUESTION 19 In order to pay the least income tax possible in periods of rising inventory costs, the company should use which of the following inventory costing methods A Specific identification B Average cost C FIFO D LIFO 2 points QUESTION 20 produces the highest cost of goods sold and the lowest gross profit when prices are increasing A Average cost B LIFO C Specific identification D FIFO 1 QUESTION 1 A method of valuing inventory based on the assumption that the oldest goods will be sold first is called the A B LIFO method specific cost method C FIFO method D average cost method 2 points QUESTION 2 1 The inventory system that uses the merchandise inventory account as an active account is called the perpetual system B LIFO system A C FIFO system D periodic system 2 points 1 QUESTION 3 The entry to record a purchase of merchandise on credit using a perpetual inventory system is A B statement of retained earnings Debit Cost of Goods Sold and credit Accounts Payable C Credit Merchandise Inventory and debit Accounts Payable D Debit Merchandise Inventory and credit Accounts Payable 2 points QUESTION 4 1 A firm that sells a single product had a beginning inventory of 5,000 units with a total cost of $20,000 Early in the year, 8,000 units were purchased at $6 each Using LIFO, what is the value of the ending inventory of 2,000 units $12,0 00 B $8,00 A 0 C $24,0 00 D $10,0 00 2 points 1 QUESTION 5 Cost of goods sold is shown on the A B balance sheet as an asset income statement after gross profit C income statement before gross profit D statement of retained earnings 2 points QUESTION 6 1 Under the FIFO method, the flow of goods through the accounting records will have no relationship to the physical flow of goods through the business B exactly match the physical flow of goods through the business C closely match the physical flow of goods through the business D be the opposite of the physical flow of goods through the business A 2 points 1 QUESTION 7 Assigning LCM to the items that make up the inventory of merchandise at the end of the accounting period is an application of which of the following concepts A B Materiality Full disclosure C Conservatis m D Reliability 2 points QUESTION 8 1 Ignoring a write off of inventory that will not affect the financial statements to users of the information is an example of consistency B conservatis m C materiality A D entity 2 points 1 QUESTION 9 Goods such as milk, bread, and cheese would probably be costed using the A Goods can be costed using FIFO, LIFO, Avg , or Specific Identification B LIFO method of inventory costing C FIFO method of inventory costing D average method of inventory costing 2 points QUESTION 10 1 If Period 1 ending inventory is understated, then cost of goods sold is overstated and net income is understated in Period 1 B both cost of goods sold and net income are overstated in Period 1 C cost of goods sold is understated and net income is overstated in Period 1 D both cost of goods sold and net income are understated in Period 1 A 2 points 1 QUESTION 11 A drawback to using when inventory costs are rising is that the company reports lower net income A B C average costing LIFO specific identification costing D FIFO 2 points QUESTION 12 1 Under the average cost method, the flow of goods through the accounting records will have no relationship to the physical flow of goods through the business B exactly match the physical flow of goods through the business C be the opposite of the physical flow of goods through the business D closely match the physical flow of goods through the business A 2 points 1 QUESTION 13 A company has $8,200 in net sales, $1,100 in gross profit, $2,500 in ending inventory and $2,000 in beginning inventory The company's cost of goods sold is A $6,20 0 B $5,60 0 C $5,70 0 D $7,10 0 2 points QUESTION 14 1 produces the lowest cost of goods sold and the highest gross profit when prices are increasing A Average B FIFO C LIFO D Specific cost identification 2 points 1 QUESTION 15 A physical count of the inventory is taken when using which inventory system A Both perpetual and periodic inventory system B C Perpetual inventory system Neither perpetual or periodic inventory system D Periodic inventory system 2 points 1 QUESTION 16 Net sales minus estimated gross profit yields the estimated A B C gross profit ending inventory beginning inventory D cost of goods sold 2 points QUESTION 17 1 Under the LIFO method, the flow of goods through the accounting records will be nearly the opposite of the physical flow of goods through the business B exactly match the physical flow of goods through the business C closely match the physical flow of goods through the business D have no relationship to the physical flow of goods through the business A 2 points 1 QUESTION 18 An error in the reported inventory will cause errors in all of the following EXCEPT the A statement of retained earnings B balance sheet C following year's financial statements D cash account 2 points QUESTION 19 1 In order to pay the least income tax possible in periods of rising inventory costs, the company should use which of the following inventory costing methods Specific identification B Average cost A C FIFO D LIFO 2 points 1 QUESTION 20 produces the highest cost of goods sold and the lowest gross profit when prices are increasing A B C Average cost LIFO Specific identification D FIFO

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Subject: Answers to attached-questions QUESTION 1 A method of valuing inventory based on the assumption that the oldest goods will be sold first is called

Subject: Answers to attached-questions

QUESTION 1

A method of valuing inventory based on the assumption that the oldest goods will be sold first is called the:
A. LIFO method.
B. specific cost method.
C. FIFO method.
D. average cost method.

2 points

QUESTION 2

The inventory system that uses the merchandise inventory account as an active account is called the:
A. perpetual system.
B. LIFO system.
C. FIFO system.
D. periodic system.

2 points

QUESTION 3

The entry to record a purchase of merchandise on credit using a perpetual inventory system is:

	A.	statement of retained earnings.
	B.	Debit Cost of Goods Sold and credit Accounts Payable
	C.	Credit Merchandise Inventory and debit Accounts Payable
	D.	Debit Merchandise Inventory and credit Accounts Payable

2 points

QUESTION 4

A firm that sells a single product had a beginning inventory of 5,000 units with a total cost of $20,000. Early in the year, 8,000 units were purchased at $6 each. Using LIFO, what is the value of the ending inventory of 2,000 units?
A. $12,000
B. $8,000
C. $24,000
D. $10,000

2 points

QUESTION 5

Cost of goods sold is shown on the:
A. balance sheet as an asset.
B. income statement after gross profit.
C. income statement before gross profit.
D. statement of retained earnings.

2 points

QUESTION 6

Under the FIFO method, the flow of goods through the accounting records will:

	A.	have no relationship to the physical flow of goods through the business.
	B.	exactly match the physical flow of goods through the business.
	C.	closely match the physical flow of goods through the business.
	D.	be the opposite of the physical flow of goods through the business.

2 points

QUESTION 7

Assigning LCM to the items that make up the inventory of merchandise at the end of the accounting period is an application of which of the following concepts?
A. Materiality
B. Full disclosure
C. Conservatism
D. Reliability

2 points

QUESTION 8

Ignoring a write-off of inventory that will not affect the financial statements to users of the information is an example of
A. consistency.
B. conservatism.
C. materiality.
D. entity.

2 points

QUESTION 9

Goods such as milk, bread, and cheese would probably be costed using the:
A. Goods can be costed using FIFO, LIFO, Avg., or Specific Identification
B. LIFO method of inventory costing.
C. FIFO method of inventory costing.
D. average method of inventory costing.

2 points

QUESTION 10

If Period 1 ending inventory is understated, then:

	A.	cost of goods sold is overstated and net income is understated in Period 1.
	B.	both cost of goods sold and net income are overstated in Period 1.
	C.	cost of goods sold is understated and net income is overstated in Period 1.
	D.	both cost of goods sold and net income are understated in Period 1.

2 points

QUESTION 11

A drawback to using ________________ when inventory costs are rising is that the company reports lower net income.
A. average costing
B. LIFO
C. specific-identification costing
D. FIFO

2 points

QUESTION 12

Under the average cost method, the flow of goods through the accounting records will:

	A.	have no relationship to the physical flow of goods through the business.
	B.	exactly match the physical flow of goods through the business.
	C.	be the opposite of the physical flow of goods through the business.
	D.	closely match the physical flow of goods through the business.

2 points

QUESTION 13

A company has $8,200 in net sales, $1,100 in gross profit, $2,500 in ending inventory and $2,000 in beginning inventory. The company?s cost of goods sold is:
A. $6,200.
B. $5,600.
C. $5,700.
D. $7,100.

2 points

QUESTION 14

___________ produces the lowest cost of goods sold and the highest gross profit when prices are increasing.
A. Average cost
B. FIFO
C. LIFO
D. Specific identification

2 points

QUESTION 15

A physical count of the inventory is taken when using which inventory system?
A. Both perpetual and periodic inventory system
B. Perpetual inventory system
C. Neither perpetual or periodic inventory system
D. Periodic inventory system

2 points

QUESTION 16

Net sales minus estimated gross profit yields the estimated:
A. gross profit.
B. ending inventory.
C. beginning inventory.
D. cost of goods sold.

2 points

QUESTION 17

Under the LIFO method, the flow of goods through the accounting records will:

	A.	be nearly the opposite of the physical flow of goods through the business.
	B.	exactly match the physical flow of goods through the business.
	C.	closely match the physical flow of goods through the business.
	D.	have no relationship to the physical flow of goods through the business.

2 points

QUESTION 18

An error in the reported inventory will cause errors in all of the following EXCEPT the:
A. statement of retained earnings.
B. balance sheet.
C. following year?s financial statements.
D. cash account.

2 points

QUESTION 19

In order to pay the least income tax possible in periods of rising inventory costs, the company should use which of the following inventory costing methods?
A. Specific identification
B. Average cost
C. FIFO
D. LIFO

2 points

QUESTION 20

__________ produces the highest cost of goods sold and the lowest gross profit when prices are increasing.
A. Average cost
B. LIFO
C. Specific identification
D. FIFO

1. QUESTION 1 A method of valuing inventory based on the assumption that the oldest goods will be sold first is called the: A . B . LIFO method. specific cost method. C FIFO method. . D average . cost method. 2 points QUESTION 2 1. The inventory system that uses the merchandise inventory account as an active account is called the: perpetual system. B LIFO system. A . . C FIFO system. . D periodic . system. 2 points 1. QUESTION 3 The entry to record a purchase of merchandise on credit using a perpetual inventory system is: A . B . statement of retained earnings. Debit Cost of Goods Sold and credit Accounts Payable C Credit Merchandise Inventory and debit Accounts . Payable D Debit Merchandise Inventory and credit Accounts . Payable 2 points QUESTION 4 1. A firm that sells a single product had a beginning inventory of 5,000 units with a total cost of $20,000. Early in the year, 8,000 units were purchased at $6 each. Using LIFO, what is the value of the ending inventory of 2,000 units? $12,0 00 B $8,00 A . 0 C $24,0 . 00 D $10,0 . 00 . 2 points 1. QUESTION 5 Cost of goods sold is shown on the: A . B . balance sheet as an asset. income statement after gross profit. C income statement before gross . profit. D statement of retained earnings. . 2 points QUESTION 6 1. Under the FIFO method, the flow of goods through the accounting records will: have no relationship to the physical flow of goods through the business. B exactly match the physical flow of goods through the . business. C closely match the physical flow of goods through the . business. D be the opposite of the physical flow of goods through the . business. A . 2 points 1. QUESTION 7 Assigning LCM to the items that make up the inventory of merchandise at the end of the accounting period is an application of which of the following concepts? A . B . Materiality Full disclosure C Conservatis . m D Reliability . 2 points QUESTION 8 1. Ignoring a write-off of inventory that will not affect the financial statements to users of the information is an example of consistency . B conservatis . m. C materiality. A . . D entity. . 2 points 1. QUESTION 9 Goods such as milk, bread, and cheese would probably be costed using the: A . Goods can be costed using FIFO, LIFO, Avg., or Specific Identification B LIFO method of inventory costing. . C FIFO method of inventory costing. . D average method of inventory costing. . 2 points QUESTION 10 1. If Period 1 ending inventory is understated, then: cost of goods sold is overstated and net income is understated in Period 1. B both cost of goods sold and net income are overstated in . Period 1. C cost of goods sold is understated and net income is . overstated in Period 1. D both cost of goods sold and net income are understated in . Period 1. A . 2 points 1. QUESTION 11 A drawback to using ________________ when inventory costs are rising is that the company reports lower net income. A . B . C . average costing LIFO specific-identification costing D FIFO . 2 points QUESTION 12 1. Under the average cost method, the flow of goods through the accounting records will: have no relationship to the physical flow of goods through the business. B exactly match the physical flow of goods through the . business. C be the opposite of the physical flow of goods through the . business. D closely match the physical flow of goods through the . business. A . 2 points 1. QUESTION 13 A company has $8,200 in net sales, $1,100 in gross profit, $2,500 in ending inventory and $2,000 in beginning inventory. The company's cost of goods sold is: A . $6,20 0. B $5,60 . 0. C $5,70 . 0. D $7,10 . 0. 2 points QUESTION 14 1. ___________ produces the lowest cost of goods sold and the highest gross profit when prices are increasing. A Average . B FIFO . C LIFO . D Specific . cost identification 2 points 1. QUESTION 15 A physical count of the inventory is taken when using which inventory system? A . Both perpetual and periodic inventory system B . C . Perpetual inventory system Neither perpetual or periodic inventory system D Periodic inventory system . 2 points 1. QUESTION 16 Net sales minus estimated gross profit yields the estimated: A . B . C . gross profit. ending inventory. beginning inventory. D cost of goods . sold. 2 points QUESTION 17 1. Under the LIFO method, the flow of goods through the accounting records will: be nearly the opposite of the physical flow of goods through the business. B exactly match the physical flow of goods through the . business. C closely match the physical flow of goods through the . business. D have no relationship to the physical flow of goods through the . business. A . 2 points 1. QUESTION 18 An error in the reported inventory will cause errors in all of the following EXCEPT the: A . statement of retained earnings. B balance sheet. . C . following year's financial statements. D cash account. . 2 points QUESTION 19 1. In order to pay the least income tax possible in periods of rising inventory costs, the company should use which of the following inventory costing methods? Specific identification B Average cost A . . C FIFO . D LIFO . 2 points 1. QUESTION 20 __________ produces the highest cost of goods sold and the lowest gross profit when prices are increasing. A . B . C . Average cost LIFO Specific identification D FIFO

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Previous Question Next Question

	A.	LIFO method.
	B.	specific cost method.
	C.	FIFO method.
	D.	average cost method.

	A.	perpetual system.
	B.	LIFO system.
	C.	FIFO system.
	D.	periodic system.

	A.	balance sheet as an asset.
	B.	income statement after gross profit.
	C.	income statement before gross profit.
	D.	statement of retained earnings.

	A.	Goods can be costed using FIFO, LIFO, Avg., or Specific Identification
	B.	LIFO method of inventory costing.
	C.	FIFO method of inventory costing.
	D.	average method of inventory costing.

	A.	average costing
	B.	LIFO
	C.	specific-identification costing
	D.	FIFO

	A.	Both perpetual and periodic inventory system
	B.	Perpetual inventory system
	C.	Neither perpetual or periodic inventory system
	D.	Periodic inventory system

	A.	gross profit.
	B.	ending inventory.
	C.	beginning inventory.
	D.	cost of goods sold.

	A.	statement of retained earnings.
	B.	balance sheet.
	C.	following year?s financial statements.
	D.	cash account.

	A.	consistency.
	B.	conservatism.
	C.	materiality.
	D.	entity.

	A.	$6,200.
	B.	$5,600.
	C.	$5,700.
	D.	$7,100.