IUP Inventory

What is the primary purpose of inventory in a business?

• To generate revenue through sales

• To manage employee performance

• To track customer satisfaction

• To reduce operational costs

Which inventory system provides a continuous record of inventory balances?

• Dynamic System

• Static System

• Perpetual System

• Periodic System

What is included in the cost of inventory?

• Marketing costs

• Transportation costs

• Selling expenses

• Administrative expenses

Which method assumes that the oldest inventory items are sold first?

• Average Cost

• First-In, First-Out (FIFO)

• Specific Identification

• Last-In, First-Out (LIFO)

What is the effect of understating ending inventory?

• Increases assets

• No effect on net income

• Decreases net income

• Increases net income

Which of the following is NOT a classification of inventory for a manufacturing company?

• Merchandising Inventory

• Raw Materials

• Work in Process

• Finished Goods

What does the term 'goods in transit' refer to?

• Goods that are stored in a warehouse

• Goods that are sold but not yet delivered

• Goods that are returned to the supplier

• Goods that are being shipped to a customer

Which inventory valuation method is least likely to be manipulated?

• Specific Identification

• Average Cost

• First-In, First-Out (FIFO)

• Last-In, First-Out (LIFO)

What is the primary difference between perpetual and periodic inventory systems?

• Cost of goods sold calculation

• Type of inventory recorded

• Number of inventory accounts

• Frequency of inventory counts

In a consignment arrangement, who retains ownership of the goods?

• The customer

• The consignor

• The supplier

• The consignee