Advanced Accounting Ch. 5 Review

Shipping terms where title to the goods passes to the buyer when the buyer receives the goods is called

• FOB destination

• FOB delivery

• FOB shipping point

• FOB consignment

The costing method that uses the price of merchandise purchased last to calculate the cost of merchandise sold first is called

• first-in, first out

• lower of cost or market

• last-in, first-out

• weighted average

A form used to show the type of merchandise, quantity received, quantity sold, and balance on hand is called a(n)

• stock ledger

• purchase order

• stock record

• invoice

The costing method that uses the lower of cost or market price to calculate the cost of the ending merchandise inventory is called the

• first-in, first-out method

• lower of cost or market method

• last-in, first-out method

• weighted-average method

A form used during a physical inventory to record information about each item of merchandise on hand is called a(n)

• stock record

• stock ledger

• inventory record

• merchandise-on-hand record

Goods that are given to a business to sell but for which title remains with the vendor are called a

• consignment

• purchase

• sale

• consignee

The number of times the average amount of merchandise inventory is sold during a specific period of time is called the

• average number of days' sales in merchandise inventory

• average sales turnover ratio

• inventory sales period ratio

• inventory turnover ratio

If an inventory is taken once each year, the business must be using the perpetual inventory method.

• True

• False

The cost of goods sold calculated using the weighted-average method will always be between the amounts calculated using the LIFO and FIFO methods.

• True

• False

If the ending inventory is understated, retained earnings will be understated.

• True

• False