CHAP008 - Chapter 8 Inventories Measurement True/False...

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Chapter 8 Inventories Measurement True/False Questions 1. Under FIFO, LIFO, and average cost, the cost flow of a product does not depend on the physical flow. Answer: True Learning Objective: 4 Level of Learning: 1 2. Physical counts of inventory are not needed with perpetual inventory systems. Answer: False Learning Objective: 1 Level of Learning: 1 3. The main difference between perpetual and periodic inventory systems is the timing of allocating costs between inventory and cost of goods sold. Answer: True Learning Objective: 1 Level of Learning: 1 4. Cost of goods on consignment is included in the consignee's inventory until sold. Answer: False Learning Objective: 2 Level of Learning: 1 5. Net purchases are reduced for discounts taken whether the net method is used or the gross method is used. Answer: True Learning Objective: 3 Level of Learning: 1 6. Inventory costing methods are merely means by which costs are allocated between ending inventory and cost of goods sold. Answer: True Learning Objective: 4 Level of Learning: 1 7. LIFO periodic and LIFO perpetual usually produce the same amounts for ending inventory. Answer: False Learning Objective: 1 Level of Learning: 2 8. FIFO periodic and FIFO perpetual produce the same amounts for cost of goods sold. Answer: True Learning Objective: 1 Level of Learning: 2 9. During periods of falling prices, LIFO ending inventory will be less than FIFO ending inventory. Answer: False Learning Objective: 4 Level of Learning: 1 10. LIFO always provides a better match of revenue and expense than does FIFO. Answer: False Learning Objective: 5 Level of Learning: 1 11. Unit LIFO is more costly to implement than dollar-value LIFO. Answer: True Learning Objective: 5 Level of Learning: 2 Spiceland/Sepe/Tomassini, Intermediate Accounting, Fourth Edition 19
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Chapter 8 Inventories Measurement 12. Dollar-value LIFO eliminates the risk of LIFO liquidations. Answer: False Learning Objective: 8 Level of Learning: 1 Matching Pair Questions Use the following to answer questions 13-17: 13-17. Listed below are ten terms followed by a list of phrases that describe or characterize five of the terms. Match each phrase with the correct term placing the letter designating the best term in the space provided by the phrase. Terms: A. Finished goods B. Freight-in C. Cost of Goods available for sale D. LIFO conformity rule E. LIFO liquidation F. LIFO pools G. Net purchases H. Periodic inventory system I. Perpetual inventory system J. Physical flow Phrases: 13. _____ Adjusts inventory at the end of the period. 14. _____ Allocated between ending inventory and cost of goods sold. 15. _____ Reduced by discounts taken under both gross and net methods. 16.
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CHAP008 - Chapter 8 Inventories Measurement True/False...

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