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Intermediate Accounting 1 (3367) Chapter 8 Quiz Fall 2010… 1. Which of the following is a characteristic of a perpetual inventory system? a. Inventory purchases are debited to a Purchases account. b. Inventory records are not kept for every item. c. Cost of goods sold is determined as the amount of purchases less the change in inventory. d. Cost of goods sold is recorded with each sale. 2. If ending inventory is understated, then net income is understated. a. True b. False 3. If purchases is understated and ending inventory are overstated by the same amount, net income is not affected. a. True b. False 4. In all cases when FIFO is used, the cost of goods sold would be the same whether a perpetual or periodic system is used. a. True b. False 5. Which inventory costing method most closely approximates current cost for each of the following: Ending Inventory Cost of Goods Sold a. FIFO FIFO b. FIFO LIFO c. LIFO FIFO d. LIFO LIFO 6. In the context of dollar-value LIFO, what is a LIFO layer?
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This note was uploaded on 10/02/2010 for the course ACCT 5457 taught by Professor Polm during the Spring '10 term at Rensselaer Polytechnic Institute.

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