Question Details

Valuation of inventories requires the deter¬mination of all of the following except 



1.	Valuation of inventories requires the deter¬mination of all of the following except 
a.	the costs to be included in inventory.
b.	the physical goods to be included in inventory.
c.	the cost of goods held on consign¬ment from other companies.
d.	the cost flow assumption to be adopted.

	2.	The accountant for the Pryor Sales Company is preparing the income statement for 2010 and the statement of financial position at December 31, 2010. Pryor uses the periodic inventory system. The January 1, 2010 merchandise inventory balance will appear
a.	only as an asset on the statement of financial position.
b.	only in the cost of goods sold section of the income statement.
c.	as a deduction in the cost of goods sold section of the income statement and as a current asset on the statement of financial position.
d.	as an addition in the cost of goods sold section of the income statement and as a current asset on the statement of financial position.

	3.	If the beginning inventory for 2010 is overstated, the effects of this error on cost of goods sold for 2010, net income for 2010, and assets at December 31, 2011, respectively, are
a.	overstatement, understatement, overstatement.
b.	overstatement, understatement, no effect.
c.	understatement, overstatement, overstatement.
d.	understatement, overstatement, no effect.

	4.	The failure to record a purchase of mer¬chandise on account even though the goods are properly included in the physical inven¬tory results in
a.	an overstatement of assets and net income.
b.	an understatement of assets and net income.
c.	an understatement of cost of goods sold and liabilities and an overstatement of assets.
d.	an understatement of liabilities and an overstatement of equity.




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