ch08 - CHAPTER 8 VALUATION OF INVENTORIES A COST BASIS...

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CHAPTER 8 VALUATION OF INVENTORIES: A COST BASIS APPROACH MULTIPLE CHOICE —Conceptual Answer No. Description d 1. Entries under perpetual inventory system. b 2. Classification of goods in transit. a 3. Classification of goods in transit. d 4. Identify inventory ownership. d 5. Identify a product financing arrangement. a 6. Identify ownership under product financing arrangement. b 7. Classification of goods on consignment. b 8. Effect of recording merchandise on consignment. a 9. Effect of ending inventory overvaluation. a 10. Effect of inventory errors on income. d 11. Effect of understating purchases and ending inventory. b 12. Identification of product costs. d 13. Determine product costs. b 14. Interest capitalization in manufacturing inventory. d 15. Determine cost of purchased inventory, using net method. a 16. Determine cost of purchased inventory, using gross method. a 17. Recording inventory purchases at gross or net amounts. c 18. Recording inventory purchases at gross or net amounts. a 19. Nature of trade discounts. a 20. Average cost inventory valuation. b 21. Weighted-average inventory method. a 22. Nature of FIFO valuation of inventory. b 23. Flow of costs in a manufacturing situation. a 24. FIFO and decreasing prices. b 25. FIFO and increasing prices. a 26. FIFO and increasing prices. b 27. FIFO and LIFO inventory assumptions. c 28. LIFO and increasing prices. d 29. Knowledge of inventory valuation methods. d 30. Periodic and perpetual inventory methods. d 31. LIFO reserve account classification. d 32. LIFO for tax purposes and external reporting. c 33. LIFO advantages.
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Test Bank for Intermediate Accounting, Eleventh Edition MULTIPLE CHOICE —Computational Answer No. Description d 34. Effect of inventory and depreciation errors on income. a 35. Effect of inventory and depreciation errors on retained earnings. a 36. Effect of inventory errors on working capital. d 37. Calculate cost of goods available for sale. d 38. Accounting for a purchase return (net method). d 39. Adjust Accounts Payable using the net method. b 40. Calculate ending inventory using weighted-average. d 41. Calculate ending inventory using moving average. b 42. Calculate ending inventory using LIFO. d 43. Calculate cost of goods sold using FIFO. a 44. Effect of using LIFO or FIFO. a 45. Perpetual inventory—LIFO valuation. c 46. Perpetual inventory—LIFO valuation. c 47. Perpetual inventory—FIFO valuation. b 48. Perpetual inventory—average cost valuation. c 49. Calculate ending inventory using dollar-value LIFO. c 50. Calculate ending inventory using dollar-value LIFO. a 51. Calculate ending inventory using dollar-value LIFO. b 52. Calculate price index using double extension method. MULTIPLE CHOICE
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ch08 - CHAPTER 8 VALUATION OF INVENTORIES A COST BASIS...

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