ACCCOB2_5_Inventories2

A manufacturing concern would report the cost of units only partially processed as inventory in the Statement of Financial Position.

• T

• F

Both merchandising and manufacturing companies normally have multiple inventory accounts.

• T

• F

The cost flow assumption adopted must be consistent with the physical movement of the goods.

• T

• F

In all cases when FIFO is used, the cost of goods sold would be the same whether a perpetual or periodic system is used.

• T

• F

Where should raw materials be classified on the Statement of Financial Position?

• Prepaid expenses

• Inventory

• Equipment

• Not on the Statement of Financial Position

When using a perpetual inventory system,

• no Purchases account is used.

• a Cost of Goods Sold account is used.

• two entries are required to record a sale.

• all the choices are applicable for a perpetual inventory system.

Which of the following items should be included in a company's inventory at the Statement of Financial Position date?

• Goods in transit which were purchased FOB destination

• Goods received from another company for sale on consignment

• Goods sold to a customer which are being held for the customer to call for at his or her convenience

• None of the choices

Valuation of inventories requires the deter­mination of all of the following EXCEPT

• the costs to be included in inventory.

• the physical goods to be included in inventory.

• the cost of goods held on consign­ment from other companies.

• the cost flow assumption to be adopted.

Which of the following is a product cost as it relates to inventory?

• Selling costs

• Work in process

• Interest costs

• Abnormal spoilage

Which method may be used to record cash discounts a company receives for paying suppliers promptly?

• Net method

• Gross method

• Average method

• Either net method or gross method