ACC 556 Week 3 Quiz | Assignment Help | Strayer University
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- 27 Jul 2020
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ACC 556 Week 3 Quiz | Assignment Help | Strayer University
Practice Question Paper (Part-2)
Practice Question 03
When is a physical inventory usually taken?
o
When goods are not being sold or
received.
o
When a company has its greatest amount
of inventory and when goods are not being sold or received.
o
When the company has its greatest amount
of inventory.
o
At the end of the company’s fiscal year.
Practice Question 04
Which of the following should not be included
in the physical inventory of a company?
o
Goods in transit from another company
shipped FOB shipping point
o
All of the answer choices are correct
o
Goods held on consignment from another
company
o
Goods shipped on consignment to another
company
Practice Question 05.
As a result of a
thorough physical inventory, Railway Company determined that it had inventory
worth $180,000 at December 31, 2017. This count did not take into consideration
the following transactions:
Rogers Consignment
store currently has goods worth $35,000 on its sales floor that belong to
Railway but are being sold on consignment by Rogers. The selling price of these
goods is $50,000.
Railway purchased
$13,000 of goods that were shipped on December 27, FOB destination, that will
be received by Railway on January 3.
Determine the correct
amount of inventory that Railway should report.
o
$193,000
o
$228,000
o
$230,000
o
$215,000
Practice Question 06
Which of the following
is not an inventory account?
o
Raw materials
o
Equipment
o
Work in process
o
Finished goods
Practice Question 07
Which of the following is not a legitimate
business reason for taking a physical inventory?
o
To verify the profitability of
individual inventory items
o
To determine cost of goods sold
o
To determine if any inventory has been
lost from waste, shoplifting, or employee theft
o
To check the accuracy of the perpetual
inventory records
Practice Question 08
Ownership passes to the buyer when purchased
goods are received from a public carrier if the goods are shipped
o
FOB shipping point.
o
FOB buyer.
o
FOB destination.
o
FOB shipper.
Practice Question 09
Ownership passes to the buyer when the public
carrier accepts the goods if the goods are shipped
o
FOB shipper.
o
FOB destination.
o
FOB shipping point.
o
FOB buyer.
Practice Question 11
Cecil gives goods on consignment to Jerry who
agrees to try to sell them for a 25% commission. At the end of the accounting
period, which of the following parties includes in its inventory the consigned
goods?
o
Cecil
o
Jerry
o
Both Cecil and Jerry
o
Neither Cecil nor Jerry
Practice Question 13
Under FIFO, cost of goods sold consists of the
units with the oldest costs.
o
True
o
False
Practice Question 14
Inventory costing methods place primary
reliance on assumptions about the flow of
o
Resale prices.
o
Values.
o
Goods.
o
Costs.
Practice Question 16
Which of the following is not an acceptable
inventory costing method?
o
Average cost
o
Last-in, last-out
o
Last-in, first-out
o
First-in, first-out
Practice Question 18
Which of the following would most likely
employ the specific identification method of inventory costing?
o
Hardware store
o
Grocery store
o
Gasoline station
o
Jewelry store
Practice Question 19
Which of the following statements is true?
o
LIFO inventory valuation requires
physical flow of goods to be representative of the cost flow.
o
FIFO inventory valuation requires
physical flow of goods to be representative of the cost flow.
o
Specific identification method inventory
valuation requires physical flow of goods to be representative of the cost
flow.
o
All of these answer choices are correct.
Practice Question 20
Which of the following
statements is true?
o
The IRS dictates the method of inventory
costing method a company must use.
o
The SEC dictates the method of inventory
costing method a company must use.
o
Company management selects the method of
inventory costing method a company will use.
o
GAAP dictates the method of inventory
costing method a company must use.
Practice Question 21
Kam Company has the following units and costs:
Units Unit Cost
Inventory, Jan. 1 8,000 $11
Purchase, June 19 13,000 12
Purchase, Nov. 8 5,000 13
If 9,000 units are on
hand at December 31, what is the cost of the ending inventory under FIFO using
a periodic inventory system?
o
$99,000
o
$113,000
o
$108,000
o
$117,000
Practice Question 23
Davidson Electronics has the following:
Units Unit Cost
Inventory, Jan. 1 5,000 $ 8
Purchase, April 2 15,000 10
Purchase, Aug. 28 20,000 12
If Davidson has 7,000
units on hand at December 31, how much is the cost of ending inventory under
the average-cost method in a periodic inventory system?
o
$56,000
o
$84,000
o
$75,250
o
$70,000
Practice Question 22
Ending inventory =
(8,000 × $11) + (1,000 × $12) = $100,000.
Kam Company has the
following units and costs:
Units Unit Cost
Inventory, Jan. 1 8,000 $11
Purchase, June 19 13,000 12
Purchase, Nov. 8 5,000 13
If 9,000 units are on
hand at December 31, what is the cost of the ending inventory under LIFO using
a periodic inventory system?
o
$108,000
o
$113,000
o
$99,000
o
$100,000
Practice Question 26
Which one of the following is not a
consideration that affects the selection of an inventory costing method?
o
Income statement effects
o
Balance sheet effects
o
Perpetual versus periodic inventory
system
o
Tax effects
Practice Question 25
In periods of rising prices, what will LIFO
produce?
o
Lower net income than FIFO
o
The same net income as FIFO
o
Higher net income than average costing
o
Higher net income than FIFO
Practice Question 24
In a period of inflation, LIFO produces a
higher net income than FIFO.
o
True
o
False
Practice Question 28
In a period of rising prices which inventory
method will result in the greatest amount of income tax expense?
o
FIFO
o
Average cost
o
LIFO
o
Specific identification
Practice Question 29
With the assumption of costs and prices
generally rising, which of the following is correct?
o
Specific identification method provides
the closest cost of goods sold to replacement cost on the income statement.
o
FIFO provides the closest cost of goods
sold to replacement cost.
o
LIFO provides the closest valuation of
inventory on the balance sheet to replacement cost.
o
LIFO provides the closest valuation of
cost of goods sold to replacement cost of inventory sold.
Practice Question 31
Two companies report the same cost of goods
available for sale, but each employs a different inventory costing method. If
the price of goods has increased during the period, which statement is true?
o
The company using LIFO will have the
lowest cost of goods sold.
o
The company using FIFO will have the
highest ending inventory.
o
The company using LIFO will have the
highest ending inventory.
o
The company using FIFO will have the
highest cost of good sold.
Practice Question 30
In a period of falling
prices, which of the following methods will give the largest net income?
o
LIFO
o
Average-cost
o
Specific identification
o
FIFO
Practice Question 32
Which situation requires a departure from the
cost basis of accounting to the lower-of-cost-or-market basis in valuing
inventory?
o
A desire for more profit
o
An increase in selling price
o
An increase in the value of the
inventory
o
A decline in the value of the inventory
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