QUIZ 4 : TOPIC 8 [ACCOUNTING FOR INVENTORIES]

The inventory of a business will increase when there are :

• sales and sales returns

• purchase and purchase returns

• sales and purchase returns

• purchase and sales returns

In perpetual inventory system, what entries are made to record purchase returns.

• debit accounts payable ; credit purchase returns

• debit purchase returns; credit accounts payable

• debit inventory ; credit accounts payable

• debit accounts payable; credit inventory

The inventory of a business will decrease when there are :

• sales and sales returns

• purchase and purchase returns

• sales and purchase returns

• purchase and sales returns

The cost of goods sold is determine and recorded when purchases and sales occur. This statement refer to

• Periodic inventory system

• Perpetual inventory system

Physical stock count will be made at the end of each accounting period to enable the determination of cost of goods sold. This statement is suitable for

• Periodic inventory system

• Perpetual inventory system

Inventory record will be updated continuously after each purchase or sale, these is an advantages of

• Periodic inventory system

• Perpetual inventory system

Inventory record will be updated monthly, quarterly or at the end of each accounting period. This statement suitable to explain

• Periodic inventory system

• Perpetual inventory system

Which inventory system is suitable to be used for the businesses with the high volume of products and with the several outlets.

• Periodic inventory system

• Perpetual inventory system

Which inventory system is suitable to be used for the small businesses with the low volume of products.

• Periodic inventory system

• Perpetual inventory system

Which of the following inventory costing method will value the ending inventory costs, closest to the current market value.

• FIRST-IN, FIRST-OUT (FIFO)

• LAST-IN, FIRST-OUT (LIFO)

• WEIGHTED-AVERAGE