Chapter 6 Accounting part 1

Costs included in the Merchandise Inventory account can include all of the following except: 

• Invoice prince minus any discount
• Transportation in
• Insurance
• Damaged inventory that can't be sold

Physical counts of inventory: 

• Are NOT necessary under the perpetual system
• Are necessary to adjust the Inventory account
• Must be taken once a month
• Require the use of hand-held portable computers

The _____________________ method of assigning costs to inventory and cost of goods sold assumes that the inventory items are sold in the order acquired. 

• FIFO 
• LIFO
• Weighted Average
• Specific Identification

The inventory valuation method that tends to smooth out erratic changes in costs is: 

• FIFO
• LIFO
• Weighted average
• Specific Identification

The ______________________ method of assigning costs to inventory and cost of goods sold requires that we divide the cost of goods available for sale by the units of inventory available at the time of each sale. 

• FIFO
• LIFO
• Weighted average
• Specific Identification

The inventory valuation method that results in the lowest taxable income in a period of inflation is:

• FIFO
• LIFO
• Weighted Average
• Specific identification

The ______________________ method of assigning costs to inventory and cost of goods sold assumes that the most recent purchases are sold first. 

• FIFO 
• LIFO
• Weighted Average
• Specific Identification

The inventory valuation method that identifies each item in ending inventory with a specific purchase and invoice is the:  

• FIFO
• LIFO
• Weighted average
• Specific identification

When applying the lower of cost or market method of inventory valuation, market is defined as the ______________________. 

• Replacement cost
• Purchase price
• Insurance cost
• Discount price

The ______________________ method of assigning costs to inventory and cost of goods sold exactly matches the costs of particular items with the revenues they generate and would be used when items can be easily traced to the purchase invoice cost. 

• FIFO 
• LIFO
• Weighted Average
• Specific Identification