Question 1

In a period of rising purchase prices, which cost flow assumption provides the highest net profit?

Accepted Answer

A)  FIFO 
B)  Moving weighted average 
C)  LIFO 
D)  All three give the same net profit 
A)  FIFO 
B)  Moving weighted average 
C)  LIFO 
D)  All three give the same net profit

Question 2

The journal entries to record a credit sale under the perpetual inventory system will include:

Accepted Answer

A)  DR Cost of goods sold 
B)  DR Sales 
C)  DR Inventory 
D)  None of the above 
A)  DR Cost of goods sold 
B)  DR Sales 
C)  DR Inventory 
D)  None of the above

Question 3

The entry to record a credit purchase when the periodic inventory method is employed will include a:

Accepted Answer

A)  debit to inventory. 
B)  credit to purchases. 
C)  debit to purchases. 
D)  debit to cost of goods sold. 
A)  debit to inventory. 
B)  credit to purchases. 
C)  debit to purchases. 
D)  debit to cost of goods sold.

Question 4

Use the information below to answer the following question. Opal Ltd uses a perpetual control system for its inventory. It had the following data for a recent period:
  What was the balance of Opal Ltd's accounts payable at the end of the period?

Accepted Answer

A)  $20 000 
B)  $40 000 
C)  $90 000 
D)  $100 000 
A)  $20 000 
B)  $40 000 
C)  $90 000 
D)  $100 000

Question 5

Inventory with a value of $420 000 was written down to $250 000 in June 2019 because of falling prices in the industry. This transaction will:

Accepted Answer

A)  decrease assets, profit and shareholders' equity. 
B)  decrease assets and profit, but not shareholders' equity. 
C)  decrease assets and shareholders' equity but not profit. 
D)  None of the above 
A)  decrease assets, profit and shareholders' equity. 
B)  decrease assets and profit, but not shareholders' equity. 
C)  decrease assets and shareholders' equity but not profit. 
D)  None of the above

Question 6

The following details relate to a perpetual inventory system:   What was the value of opening inventory?

Accepted Answer

A)  $204 000 
B)  $306 000 
C)  $459 000 
D)  $561 000 
A)  $204 000 
B)  $306 000 
C)  $459 000 
D)  $561 000

Question 7

Which of the following statements about the use of the LIFO assumption is TRUE?

Accepted Answer

A)  The LIFO assumption assigns older costs to the cost of goods sold expense account. 
B)  The LIFO assumption produces inventory asset values that are close to current costs. 
C)  The LIFO assumption produces a lower inventory asset value and the highest cost of goods sold. 
D)  None of the above 
A)  The LIFO assumption assigns older costs to the cost of goods sold expense account. 
B)  The LIFO assumption produces inventory asset values that are close to current costs. 
C)  The LIFO assumption produces a lower inventory asset value and the highest cost of goods sold. 
D)  None of the above

Question 8

The journal entries to record a credit sale under the perpetual inventory system will include a:

Accepted Answer

A)  credit to COGS. 
B)  credit to inventory. 
C)  debit to sales. 
D)  None of the above. 
A)  credit to COGS. 
B)  credit to inventory. 
C)  debit to sales. 
D)  None of the above.

In a period of rising purchase prices, which cost flow assumption provides the highest net profit?

The journal entries to record a credit sale under the perpetual inventory system will include:

The entry to record a credit purchase when the periodic inventory method is employed will include a:

Use the information below to answer the following question. Opal Ltd uses a perpetual control system for its inventory. It had the following data for a recent period: What was the balance of Opal Ltd's accounts payable at the end of the period?

Inventory with a value of $420 000 was written down to $250 000 in June 2019 because of falling prices in the industry. This transaction will:

The following details relate to a perpetual inventory system: What was the value of opening inventory?

Which of the following statements about the use of the LIFO assumption is TRUE?

The journal entries to record a credit sale under the perpetual inventory system will include a:

Introduction to Financial Accounting

Measuring and Evaluating Financial Position and Financial Performance

The Double-Entry System

Record-Keeping

Accrual Accounting Adjustments

Financial Reporting Principles, Accounting Standards and Auditing

Internal Control and Cash

Accounts Receivable and Further Record-Keeping

Noncurrent Assets

Liabilities

Investments and Shareholders Equity

Revenue and Expense Recognition: Additional Concepts

The Statement of Cash Flows

Financial Statement Analysis

Accounting Policy Choices

Sustainability Reporting

Filters

Exam 9: Inventory

In a period of rising purchase prices, which cost flow assumption provides the highest net profit?

The journal entries to record a credit sale under the perpetual inventory system will include:

The entry to record a credit purchase when the periodic inventory method is employed will include a:

Use the information below to answer the following question. Opal Ltd uses a perpetual control system for its inventory. It had the following data for a recent period: What was the balance of Opal Ltd's accounts payable at the end of the period?

Inventory with a value of $420 000 was written down to $250 000 in June 2019 because of falling prices in the industry. This transaction will:

The following details relate to a perpetual inventory system: What was the value of opening inventory?

Which of the following statements about the use of the LIFO assumption is TRUE?

The journal entries to record a credit sale under the perpetual inventory system will include a:

Introduction to Financial Accounting

Measuring and Evaluating Financial Position and Financial Performance

The Double-Entry System

Record-Keeping

Accrual Accounting Adjustments

Financial Reporting Principles, Accounting Standards and Auditing

Internal Control and Cash

Accounts Receivable and Further Record-Keeping

Noncurrent Assets

Liabilities

Investments and Shareholders Equity

Revenue and Expense Recognition: Additional Concepts

The Statement of Cash Flows

Financial Statement Analysis

Accounting Policy Choices

Sustainability Reporting

Filters