Revision Sheet.pdf - Accounting and Financial Control...

Accounting and Financial Control
Department
Financial Accounting II CTRL 202-
Spring 2019
Revision Questions – Before the Mid-term Content
Chapter (6): Inventory Valuation
Q.1. TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.
1. Goods in transit are automatically included in inventory regardless of whether title has passed to the
Revision Sheet …… .Complied By Dr. Hala Amin Page
1
2. Goods on consignment are goods shipped by their owner, called the consignor, to another party 3. If obsolete or damaged goods can be sold, they will be included in inventory at their original cost. 4. Incidental costs for acquiring merchandise inventory, such as import duties, freight, storage, and 5. The Inventory account is a controlling account for the inventory subsidiary ledger that contains a
6. The expense recognition (matching) principle is used to determine how much of the cost of goods
7. The consistency concept allows a company to use different accounting methods from period to
8. A company must disclose any change in its inventory costing method in its financial statements. 9. Whether purchase costs are rising or falling, FIFO always will yield the highest gross profit and net
10. An advantage of the weighted average inventory method is that it tends to smooth out erratic
11. If the seller is responsible for paying freight charges, then ownership of inventory passes when 12. Net realizable value for damaged or obsolete goods is sales price less the cost of making the sale. 13. The cost of an inventory item includes its invoice cost minus any discount, plus any added or
14. Incidental costs for acquiring merchandise inventory, such as import duties, freight, storage, and