A111 Chapter 10 part A: Inventory 1. All of the following are inventory costing methods, except [A] specific identification. [B] periodic. [C] average-cost. [D] first-in, first-out. 2. The most important accounting problem in dealing with inventory is the application of which of the following conventions or rules? [A] Conservatism [B] Materiality [C] Matching [D] Full disclosure 3. Which of the following is an inventory costing method? [A] Periodic [B] Lower-of-cost-or-market [C] Specific identification [D] Perpetual 4. Inventory costing methods place primary reliance on assumptions about the flow of [A] costs. [B] values. [C] resale prices. [D] goods. 5. Which of the following costs would not be included in the cost of inventory? [A] Sales tax [B] Invoice price [C] Cost of goods held on consignment [D] Freight in 6. Which of the following terms best describes the assumption made in applying the four inventory methods? [A] Physical flow [B] Asset flow [C] Cost flow [D] Goods flow 7. An assumption about cost flow is necessary [A] because it is required by income tax regulations. [B] even when there is no change in the purchase price of inventory. [C] only when the flow of goods cannot be determined. [D] because prices usually change, and tracking which units have been sold is difficult.
Use the following inventory information for the month of June to answer the question(s) below. June 1 5 14 21 30 Beginning inventory Purchase Sale Purchase Sale 10 units @ $120 60 units @ $112 40 units 30 units @ $116 28 units 8. Assuming that a periodic inventory system is used, what is cost of goods sold on a LIFO basis? [A] $3,664 [B] $3,704 [C] $7,696 [D] $7,736 9. Assuming that a periodic inventory system is used, what is cost of goods sold under the average-cost method? [A] $3,648 [B] $3,712 [C] $7,752 [D] $7,888 10. What is cost of goods sold under the specific identification method? [A] $3,704 [B] $7,696 [C] $7,736 [D] More information is needed. Use the following inventory information for the month of May to answer the question(s) below. May
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