DIY-Drill-1_InterAcc2.pdf - DO-IT-YOURSELF(DIY DRILL 1 1...

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DO-IT-YOURSELF (DIY) DRILL 1 1. Which of the following would be reported as inventory? I. Land acquired for resale by a real estate firm II. Agricultural produce held by a farm III. Partially completed goods held by a manufacturing company IV. Machinery acquired by a manufacturing company for use in the production process a. I, II, III and IV c. II, III and IV b. I, II and III d. II and III only
2. Goods on consignment should be included in the inventory of
3. Which of the following shall be included in the cost of inventories?
4. Inventories encompass I. Merchandise purchased by a retailer and held for resale II. Land and other property held for resale by real estate developer III. Finished goods produced IV. Abnormal amounts of wasted materials, labor, and other production costs
5. Under this shipping terms, the buyer pays for the freight, which legally must be borne by the seller. a. FOB shipping point, freight prepaid c. FOB destination, freight prepaid b. FOB shipping point, freight collect d. FOB destination, freight collect
6. When using the periodic inventory method, which of the following generally would not be separately accounted for in the computation of cost of goods sold?
7. How should the following costs affect a retailer’s inventory? Freight in Interest on inventory loan
8. Which of the following statements are true regarding perpetual inventory method? I. Purchases are recorded as debits to inventory account. II. The entry to record a sale includes a debit to cost of goods sold and a credit to inventory. III. After a physical inventory count, inventory is credited for any missing inventory. IV. Purchase returns are recorded by debiting accounts payable and crediting purchase returns and allowances.

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