EXAM # Review - Exam 2 Review Questions Dr. Ron Lazer...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Exam 2 – Review Questions Dr. Ron Lazer Source: Dr. Lu’s Quizzes 1. During periods of rising purchase prices, this cost flow assumption produces the highest reported net income. a. FIFO b. LIFO c. Weighted average d. All of the above 2. The correct equation that applies to the computation of cost of goods sold is a. Beginning inventory – purchases + ending inventory = cost of goods sold. b. Beginning inventory + purchases – ending inventory = cost of goods sold. c. Beginning inventory + purchases + ending inventory = cost of goods sold. d. None of the above. 3. Under this cost flow assumption, the costs assigned to the ending inventory are the costs of the earliest units acquired. a. FIFO b. LIFO c. Weighted average d. All of the above
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
4. Under this cost flow assumption, the income statement reports out-of-date cost of goods sold. a. FIFO b. LIFO c. Weighted average d. All of the above 5. The amount the firm would have to pay to acquire a replacement for an inventory item at that particular time is the a. Replacement cost. b. Net realizable value. c. Standard cost. d. Market selling price. 6. This cost flow assumption conforms to most actual physical inventory flows. a. FIFO b. LIFO c. Weighted average d. None of the above 7. If a firm uses this inventory flow assumption for income tax reporting, the IRS requires it use for financial reporting to owners. a. FIFO b. LIFO c. Weighted average d. None of the above
Background image of page 2
8. Conventionally, accountants refer to the difference between sales and cost of goods sold as the a. Operating income. b. Realized holding gain/loss. c. Unrealized holding gain/loss. d. Gross margin. 9. The difference between the current replacement cost of the ending inventory and its acquisition cost is the a. Operating income. b.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/09/2010 for the course ACCT 2331 taught by Professor Staff during the Fall '08 term at University of Houston.

Page1 / 8

EXAM # Review - Exam 2 Review Questions Dr. Ron Lazer...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online