Acct1QzCh6,7,8.rtf - Quiz, Chapter 6,7,8 Multiple Choice...

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Quiz, Chapter 6,7,8 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Taking a physical count of inventory a. is not necessary when a periodic inventory system is used b. is a detective control c. has no internal control relevance d. is not necessary when a perpetual inventory system is used ____ 2. The inventory method that assigns the most recent costs to cost of good sold is a. FIFO b. LIFO c. average d. specific identification ____ 3. The inventory costing method that reflects the cost flow in the reverse order and will report the earliest costs in ending inventory is a. First in first out b. Last in first out c. Average cost d. Specific identification ____ 4. Which of the following companies would be more likely to use the specific identification inventory costing method? a. Gordon’s Jewelers b. Lowe’s c. Best Buy d. Wal-Mart Use the following information to answer Questions 23-28. The Boxwood Company sells blankets for $60 each. The following was taken from the inventory records during May. Date Product Z Units Cost May 3 Purchase 5 $30 May 10 Sale 3 May 17 Purchase 10 $34 May 20 Sale 6 May 23 Sale 3 May 30 Purchase 10 $40 ____ 5. Assuming that the company uses the perpetual inventory system, determine the ending inventory for the month of May the LIFO inventory cost method. a. $362 b. $548 c. $520
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d. $494 ____ 6. During times of rising prices, which of the following is not an accurate statement? a. Average costing will yield results that are between those of FIFO and LIFO. b. LIFO will result in a higher cost of goods sold than FIFO. c. FIFO will result in a higher net income than LIFO. d. LIFO will result in higher income taxes than FIFO. ____ 7. Merchandise inventory at the end of the year is overstated. Which of the following statements correctly states the effect of the error? a. stockholders’ equity is overstated b. cost of merchandise sold is overstated c. gross profit is understated d. net income is understated ____ 8. Kristin’s Boutiques has identified the following items for possible inclusion in its December 31, 2010 inventory. Which of the following would not be included in the year end inventory? a. Merchandise purchased FOB shipping point was picked up by the freight company but had still not arrived at Kristin’s Boutique as of December 31, 2010. b. Kristin has in its warehouse merchandise on consignment from Abby Co. c.
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This note was uploaded on 11/15/2009 for the course ACCOUNTING 236 taught by Professor Nino during the Spring '09 term at Whittier.

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Acct1QzCh6,7,8.rtf - Quiz, Chapter 6,7,8 Multiple Choice...

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