COCU 4 : INVENTORY CONTROL (2/3)

Which cost flow assumption would be most appropriate when a relatively small number of costly, easily distinguishable items are sold?

• LIFO

• FIFO

• Average

• Specific identification

Which of the following statements related to the FIFO method is incorrect?

• FIFO is appropriate where prices tend to lead costs

• FIFO is not preferable in situations where it has been traditional

• FIFO is preferable if revenues have been increasing slower than costs

• FIFO is not appropriate in situations where specific identification is traditional

18.        Which accounts need to be debited each time a perpetual sale on account is made?

• Inventory and Cost of Goods Sold

• Accounts Payable and Purchases

• Accounts Receivable and Purchases

• Accounts Receivable and Cost of Goods Sold

Which of the following accounts does not exist in a perpetual inventory system?

• Inventory

• Purchases

• Cost of Goods Sold

• Sales Returns and Allowances

What is Inventory costing methods place primary reliance on assumptions about the flow?

• costs

• Goods

• value

• Resale prices

Which expenses result from not keeping enough stock on hand?

• Lost sales

• customer disappointment

• Monthly revenue will increase

• Will result in the termination of the employee

Which of the following statements is accurate regarding safety stock?

• The safety stock is bigger

• the greater the money invested in inventory`s potential cost

• The more safety stock required, the larger the required profit margin per unit

• the safety stock decreases in proportion to the level of demand forecast uncertainly

What benefits do maintaining high stock levels offer?

• low management costs

• Certain goods might perish

• Higher storage and insurance costs

• Stock may become obsolete before used

What is advantage of Keeping little or no stock and negotiating with suppliers to deliver stock?

• Efficient and flexible

• Lower storage costs

• date and develop new products

• Dependent on the efficiency suppliers

What are three main types of stock?

• Stock and negotiating

• Raw materials and components

• Work in progress stocks of unfinished

• Stocks of unfinished goods in production