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WorksheetsQUIZ 2 : TOPIC 8 [ACCOUNTING FOR INVENTORIES]
Total questions: 20
Worksheet time: 10mins
What do we mean by inventories?
Inventories are goods purchased for own used and held in a company warehouse
Inventories are goods and services sold to customers in normal business operation
Inventories are goods purchased for resale in the normal course of business
Inventories are goods purchased for resale within the two years it was acquired
In perpetual inventory system
the balance is adjusted at the end of the accounting period
the balance of goods is constantly moving
the ending inventory is only updated when the physical inventory is conducted
is suitable for a small business
In the first-in, first-out (FIFO) method
the last units acquired are the first units to be sold
the last units acquired are the last units to be sold
the first units acquired are the first units to be sold
the first units acquired are the last units to be sold
The most outdated purchases included in the inventory value is found in the _________________ method.
standard costs
weighted average
last-in, first-out (LIFO)
first-in, first-out (FIFO)
The ending inventory value comprises costs from the earliest purchases. This statement refers to the
last-in, first-out (LIFO) method
first-in, first-out (FIFO) method
weighted average method
standard cost method
The easiest method to apply in inventory evaluation is
last-in, first-out (LIFO)
first-in, first-out (FIFO)
weighted average
standard cost
The inventory evaluation method which does not represent the actual ending inventory value is
last-in, first-out (LIFO)
first-in, first-out (FIFO)
weighted average
standard cost
Cost of goods sold is equal to
Purchases + Beginning inventory - Ending Inventory
Ending Inventory + Purchases - Beginning inventory
Beginning inventory - Purchases + Ending Inventory
Beginning inventory + Sales - Ending Inventory
Cost of goods available for sale is equal to
Purchases - Beginning inventory
Ending Inventory + Purchases
Beginning inventory + Purchases
Beginning inventory + Sales
The costs of ending inventory is similar under both periodic and perpetual inventory system if _________________ method is used.
last-in, first-out (LIFO)
first-in, first-out (FIFO)
weighted average
standard cost
Which type of inventory system continually updates the inventory account with each purchase and sale?
periodic inventory system
perpetual inventory system
When an inventory purchase is paid for with cash, what account is credited?
bank
cash
accounts payable
Josh makes an inventory purchase for his company. It is worth RM2,000, and he pays in cash. Based on this purchase, which account should be debited?
accounts receivable
inventory
accounts payable
cash
If a company is experiencing continuous cost increases for the merchandise that it purchases, which costing method assumption will result in the least amount of profit and the least amount of income tax expense?
LIFO
FIFO
Weighted Average
A company in the computer industry is experiencing continuously lower costs. Which cost flow assumption will result in less income tax expense for this company?
LIFO
FIFO
Weighted Average
The difference between the Cost of Goods Available for sale and the Cost of Goods Sold is
gross profit
ending inventory
beginning inventory
sales
purchases
The inventory system that does NOT update the Inventory account automatically at the time of each purchase or sales is the _______________ system.
periodic
perpetual
The inventory costing method assumption where the oldest cost of inventory items is likely to remain on the statement of financial position is
LIFO
FIFO
Weighted Average
The inventory costing method assumption where the cost of the most recent purchases are likely to remain in inventory is
LIFO
FIFO
Weighted Average
The inventory costing method assumption where the cost of the most recent purchase is matched first against sales revenues is
LIFO
FIFO
Weighted Average
