ACCT 105 Week 4 Quiz

ACCT 105 Week 4 Quiz | Assignment Help | American Public University System

ACCT 105 Week 4 Quiz

 

During a period of rising prices, which inventory costing method might be expected to give the lowest valuation for inventory on the balance sheet?

Question options:

 

o   LIFO

o   FIFO

o   Weighted-average cost

o   Specific identification

 

 

Question 2    

An overstated ending inventory leads to understated net income.

Question options:

 

o   True

o   False

 

Question 3                

On January 1, 2007, Nichols Company's inventory of Item X consisted of 2,000 units that cost $8 each. During 2007 the company purchased 5,000 units of Item X at $10, each, and it sold 4,500 units. Periodic inventory procedure is used. Cost of goods sold using FIFO is:

Question options:

 

o   $45,000.

o   $36,000.

o   $41,000.

o   None of these.

 

Question 4                

The system that continuously provides the cost of the inventory on hand is called:

Question options:

 

o   Average cost.

o   Periodic.

o   Perpetual.

o   Gross profit.

o   Physical.

 

 

Question 5                

When the perpetual inventory method is used, it is never necessary to count merchandise on hand.

Question options:

 

o   True

o   False

 

Question 6                

If the beginning inventory exceeds the ending inventory, the net income is overstated.

Question options:

 

o   True

o   False

 

 

 

 

Question 7    

An overstatement of the beginning inventory will result in an overstatement of the net income for the period.

Question options:

 

o   True

o   False

 

 

Question 8                

Errors in determining the cost of the ending inventory lead to a balance sheet that does not balance and are thus readily observed.

Question options:

 

o   True

o   False

 

Question 9                

Because of the importance of consistency, a company may not change inventory costing methods unless the prior method is one that is unacceptable to the accounting profession.

Question options:

 

o   True

o   False

 

 

Question 10              

The following principle requires a company to show in its financial statements by means of a footnote or other manner, the inventory costing method used:

 

Question options:

 

o   Conservation principle.

o   Full-disclosure principle.

o   Consistency principle.

o   Business entity principle.

o   Stable monetary concept.