ACCT 212 Week 4 Quiz Ques

ACCT 212 Week 4 Quiz Ques | Devry University

Week 4: Checkpoint

Question 1

 (CO 4) The financial statements of a merchandising company will show  

A.      the same accounts as the financial statements of a service company.  

B.      gross profit after net income on the income statement.  

C.      inventory as a current asset on the balance sheet.    

D.      cost of goods sold as an operating expense on the income statement.

Question 2

(CO 4) The cost of inventory that is still on hand and has not been sold to customers is called  

A.      cost of goods sold, an expense that appears on the balance sheet.  

B.      inventory, a current asset that appears on the income statement.  

C.      inventory, a current asset that appears on the balance sheet.    

D.      purchases, an expense that appears on the income statement.

Question 3

 (CO 4) A periodic inventory system  

A.      is used for inexpensive goods.  

B.      is not expensive to maintain.  

C.      does not keep a running record of inventory on hand.  

D.      is all of the above.

Question 4

 (CO 4) All of the following costs would be included in inventory except for  

A.      freight-in.  

B.      advertising.    

C.      taxes paid on the purchase price.  

D.      insurance while in transit.

Question 5

 (CO 4) The specific-unit-cost method  

A.      will produce the highest net income. 

B.      is also known as the specific identification method.    

C.      will produce the same ending inventory as the average cost method.  

D.      is also known as the cost-of-goods sold model.

Question 6

 (CO 4) When inventory prices are increasing, the FIFO costing method will generally yield a cost of goods sold that is  

A.      higher than cost of goods sold under the LIFO method.  

B.      lower than cost of goods sold under the LIFO method.    

C.      equal to the gross profit under the LIFO method.  

D.      equal to cost of goods sold under the LIFO method.

Question 7

 (CO 4) When comparing the results of LIFO and FIFO when inventory costs are decreasing,

A.      cost of goods sold will be the lowest using FIFO.  

B.      ending inventory will be the highest using FIFO.  

C.      cost of goods sold will be the highest using LIFO.  

D.      ending inventory will be the highest using LIFO.

Question 8

 (CO 4) The _____ principle states that the financial statements of a business must report enough information for outsiders to make knowledgeable decisions about the business.  

A.      consistency  

B.      historical cost  

C.      Disclosure    

D.      conservatism

Question 9

 (CO 4) The lower-of-cost-or-market rule requires a company to report inventories at the lower of

A.      historical cost or current sales price.  

B.      historical cost or current replacement cost.    

C.      current replacement cost or sales invoice price.  

D.      FIFO cost or LIFO cost.

Question 10

 (CO 4) The gross profit rate is calculated as  

A.      cost of goods sold divided by net sales revenue.  

B.      net sales revenue minus gross profit on sales.  

C.      net sales revenue minus cost of goods sold.  

D.      gross profit divided by net sales revenue.