Practice Test Chapter 9.docx - Practice Test Chapter 9...

This preview shows page 1 - 3 out of 9 pages.

Practice Test Chapter 9- Inventories: Additional Issues1. Which of the following would notrequire the company to account for the change retrospectively?A) From average cot to FIFO.B) From FIFO to LIFO.C) From LIFO to FIFO.D) From LIFO to average cost.
2. True or False For a purchase commitment contained within a single fiscal year, if the market price is less than the contract price, the purchase is recorded at the contract price.3. True or False For a purchase commitment extending beyond the current fiscal year, if the market price on the purchase date declines from the previous year-end price, the purchase is recorded at the market price.4. Montana Co. has determined its year-end inventory on a FIFO basis to be $600,000. Information pertaining to that inventory is as follows:Selling price$620,000Costs to sell30,000Cost520,000What should be the reported value of Montana's inventory?
5. Data related to the inventories of Costco Medical Supply are presented below:SurgicalSurgicalRehabRehabEquipmentSuppliesEquipmentSuppliesSelling price$260$100$340$165Cost17090250162Costs to sell30152510In applying the lower of cost or net realizable value rule, the inventory of surgical equipment would be valued at:
6. Data related to the inventories of Alpine Ski Equipment and Supplies is presented below:SkisBootsApparelSuppliesSelling price$180,000 $140,000 $120,000 $60,000 Cost128,000 133,000 90,000 45,000 Replacement cost120,000 130,000 110,000 41,000 Sales commission10%10%10%10%In applying the lower of cost or net realizable value rule, the inventory of skis would be valued at:
7. In applying LCM, market cannot be:A) Less than net realizable value.B) Greater than the normal profit.C) Less than the normal profit margin.D) Greater than net realizable value.
8. In applying LCM, market cannot be:

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture