Advanced Accounting - Chapter 20

Front

FIFO is a method used to determine the quantity of each type of merchandise on hand.

Back

False

Front

A merchandise inventory that is larger than needed may decrease net income.

Back

True

Front

A merchandise inventory evaluated at the end of a fiscal period is known as a perpetual inventory.

Back

False

Front

The cost of merchandise sold can be calculated by subtracting the cost of merchandise available for sale from the cost of ending inventory.

Back

False

Front

Do businesses frequently establish their fiscal year to end when inventory is at a minimum?

Back

True

Front

A merchandise inventory that is smaller than needed may decrease net income.

Back

True

Front

Accounting procedures require that revenue and expenses be recorded in the accounting period in which revenue is earned and expenses are incurred.

Back

True

Front

Stock records do not reflect: decreases in quantity on hand., increases in quantity on hand., it is not necessary to show the minimum balance on stock records., the balance on hand after each increase or decrease is recorded.

Back

it is not necessary to show the minimum balance on stock records.

Front

In periods of rising prices, the inventory method which gives the lowest possible ending inventory cost is the 

Back

LIFO method

Front

When LIFO method is used, ending inventory units are priced at

Back

the earliest price.