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Unformatted text preview: CHAPTER 8 VALUATION OF INVENTORIES: A COST-BASIS APPROACH TRUE-FALSE —Conceptual Answer No. Description T 1. Work-in-process inventory. F 2. Merchandising and manufacturing inventory accounts. F 3. Perpetual inventory system. F 4. Determining when title passes. T 5. Inventory errors. T 6. Overstatement of purchases and ending inventory. F 7. Period vs. product costs. T 8. Reporting Purchase Discounts Lost. F 9. Cost flow assumption. T 10. FIFO periodic vs. perpetual system. T 11. Purchase commitments. F 12. Using LIFO for reporting purposes. F 13. LIFO liquidation. T 14. LIFO liquidations. T 15. Dollar-value LIFO F 16. Dollar-value LIFO method. F 17. LIFO-FIFO comparison. T 18. LIFO conformity rule. F 19. Selection of inventory method. T 20. Appropriateness of LIFO. MULTIPLE CHOICE —Conceptual Answer No. Description d 21. Entries under perpetual inventory system. b 22. Classification of goods in transit. a 23. Classification of goods in transit. d 24. Identify inventory ownership. d 25. Identify a product financing arrangement. a 26. Identify ownership under product financing arrangement. b 27. Classification of goods on consignment. c S 28. Valuation of inventories. b P 29. Classification of beginning inventory. b P 30. Effect of beginning inventory overstated. d S 31. Effect of understating purchases. b 32. Effect of recording merchandise on consignment. a 33. Effect of ending inventory overvaluation. a 34. Effect of inventory errors on income. d 35. Effect of understating purchases and ending inventory. Test Bank for Intermediate Accounting, Twelfth Edition MULTIPLE CHOICE —Conceptual (cont.) Answer No. Description b 36. Identification of product costs. d 37. Determine product costs. b 38. Interest capitalization in manufacturing inventory. d 39. Determine cost of purchased inventory, using net method. a 40. Determine cost of purchased inventory, using gross method. a 41. Recording inventory purchases at gross or net amounts. c 42. Recording inventory purchases at gross or net amounts. a 43. Nature of trade discounts. d S 44. Identifying inventoriable costs. b P 45. Method approximating current cost. a 46. Average cost inventory valuation. b 47. Weighted-average inventory method. a 48. Nature of FIFO valuation of inventory. b 49. Flow of costs in a manufacturing situation. a 50. FIFO and decreasing prices. b 51. FIFO and increasing prices. a 52. FIFO and increasing prices. b 53. FIFO and LIFO inventory assumptions. c 54. LIFO and increasing prices. d 55. Knowledge of inventory valuation methods. d 56. Periodic and perpetual inventory methods. d 57. LIFO reserve account classification. a S 58. Dollar-value LIFO method. a S 59. Identifying advantages of LIFO....
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This note was uploaded on 09/29/2011 for the course ACCOUNTING 3321 taught by Professor Sanchez during the Spring '11 term at Texas Pan American.
- Spring '11