Accounting for Inventory

Two methods of recording the cost price of inventory are

• Identified cost and Last-Out First-In

• Identified cost and First-In First-Out

• First-In First-Out and Last-Out First-In

• None of the above

First-In First-Out states that

• the inventory that was bought in first will be the last one that is sold

• the inventory that was bought in later will be the first one that is sold

• the inventory that was bought in first will be the first one that is sold

Inventory loss is when

• the number of units revealed by a stocktake is less than the quantity shown on an inventory card

• the number of units revealed by a stocktake is greater than the quantity shown on an inventory card

• the number of units revealed by a stocktake is the same as the quantity shown on an inventory card

Theft is a reason for

• inventory gain

• inventory loss

Under FIFO rules, the cost price of the inventory lost is determined by

• the latest cost price in the OUT column

• the oldest cost price of available inventory on hand

• the latest cost price in the IN column

• none of the above

An oversupply from suppliers can lead to

• inventory loss

• inventory gain

Under FIFO rules, the cost price of the inventory item gained is determined by the ___________ cost price recorded in the IN column.

The returns of goods by the customers are called

• sales returns

• purchases returns

• inventory loss

• inventory gain

The returns of goods to the suppliers are called

• purchases returns

• sales returns

• inventory loss

• inventory gain

The cost price of the inventory returned to the suppliers is

• the latest cost price in the IN column

• the latest cost price in the OUT column

• always determined by the supplier and the information is provided to you

• none of the above