QUIZ 2 : TOPIC 8 [ACCOUNTING FOR INVENTORIES]

What do we mean by inventories?

• Inventories are goods purchased for own used and held in a company warehouse

• Inventories are goods and services sold to customers in normal business operation

• Inventories are goods purchased for resale in the normal course of business

• Inventories are goods purchased for resale within the two years it was acquired

In perpetual inventory system

• the balance is adjusted at the end of the accounting period

• the balance of goods is constantly moving

• the ending inventory is only updated when the physical inventory is conducted

• is suitable for a small business

In the first-in, first-out (FIFO) method

• the last units acquired are the first units to be sold

• the last units acquired are the last units to be sold

• the first units acquired are the first units to be sold

• the first units acquired are the last units to be sold

The most outdated purchases included in the inventory value is found in the _________________ method.

• standard costs

• weighted average

• last-in, first-out (LIFO)

• first-in, first-out (FIFO)

The ending inventory value comprises costs from the earliest purchases. This statement refers to the

• last-in, first-out (LIFO) method

• first-in, first-out (FIFO) method

• weighted average method

• standard cost method

The easiest method to apply in inventory evaluation is

• last-in, first-out (LIFO)

• first-in, first-out (FIFO)

• weighted average

• standard cost

The inventory evaluation method which does not represent the actual ending inventory value is

• last-in, first-out (LIFO)

• first-in, first-out (FIFO)

• weighted average

• standard cost

Cost of goods sold is equal to

• Purchases + Beginning inventory - Ending Inventory

• Ending Inventory + Purchases - Beginning inventory

• Beginning inventory - Purchases + Ending Inventory

• Beginning inventory + Sales - Ending Inventory

Cost of goods available for sale is equal to

• Purchases - Beginning inventory

• Ending Inventory + Purchases

• Beginning inventory + Purchases

• Beginning inventory + Sales

The costs of ending inventory is similar under both periodic and perpetual inventory system if _________________ method is used.

• last-in, first-out (LIFO)

• first-in, first-out (FIFO)

• weighted average

• standard cost