Inventory Valuation (11-20)

11. Which type of inventory system requires updating the inventory balance at the end of the accounting period?

(a) Periodic inventory system

(b) LIFO

(c) Perpetual inventory system

(d) FIFO

Correct! Wrong!

12. In LIFO method of inventory valuation?

(a) Issue of stocks to production is at latest price

(b) Closing stock is at latest price

(c) Both (a) & (b)

(d) Neither (a) nor (b)

Correct! Wrong!

13. The inventory method that will always produce the same amount for cost of goods sold in a periodic inventory system as in a perpetual inventory system would be?

(a) FIFO

(b) LIFO

(c) Weighted average

(d) None of these

Correct! Wrong!

14. Inventory does not include?

(a) Materials used in the production of goods to be sold

(b) Assets intended to be sold in the normal course of business

(c) Equipment used in the manufacturing are sold

(d) Assets currently in production for normal sales

Correct! Wrong!

15. Net Purchases equal the invoice amount and?

(a) Plus freight-in, plus discounts

(b) Less purchase returns, plus purchase allowances

(c) Plus freight-in, less purchase discounts

(d) Plus discounts, less purchase returns

Correct! Wrong!

16. In FIFO method of inventory valuation?

(a) Closing stock is at latest price

(b) Issue of stocks to production is at earliest price

(c) Both (a) & (b)

(d) Neither (a) nor (b)

Correct! Wrong!

17. The average inventory costing method which results in a changed unit inventory cost after each successive purchase?

(a) Weighted average

(b) Moving average

(c) Specific cost

(d) Simple average

Correct! Wrong!

18. The specific cost identification inventory cost flow method has all of the following characteristics except?

(a) It identifies the cost of each physical item available for sale with either the ending inventory or cost of goods sold

(b) It relates cost flow to the specific flow of physical goods

(c) It is especially applicable when small and inexpensive items are handled in large quantities

(d) It requires individual identification of items some device like tags or serial numbers

Correct! Wrong!

19. Sales revenues are usually considered earned when?

(a) Cash is received from credit sales

(b) An order is received

(c) Goods have been transferred from the seller to the buyer

(d) Adjusting entries are made

Correct! Wrong!

20. A retail firm would normally use an inventory account titled?

(a) Finished Goods Inventory

(b) Merchandise Inventory

(c) Goods in Process Inventory

(d) Raw Materials Inventory

Correct! Wrong!

11. Which type of inventory system requires updating the inventory balance at the end of the accounting period?

12. In LIFO method of inventory valuation?

13. The inventory method that will always produce the same amount for cost of goods sold in a periodic inventory system as in a perpetual inventory system would be?

14. Inventory does not include?

15. Net Purchases equal the invoice amount and?

16. In FIFO method of inventory valuation?

17. The average inventory costing method which results in a changed unit inventory cost after each successive purchase?

18. The specific cost identification inventory cost flow method has all of the following characteristics except?

19. Sales revenues are usually considered earned when?

20. A retail firm would normally use an inventory account titled?

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