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WorksheetsQUIZ 4 : TOPIC 8 [ACCOUNTING FOR INVENTORIES]
Total questions: 20
Worksheet time: 11mins
The inventory of a business will increase when there are :
sales and sales returns
purchase and purchase returns
sales and purchase returns
purchase and sales returns
In perpetual inventory system, what entries are made to record purchase returns.
debit accounts payable ; credit purchase returns
debit purchase returns; credit accounts payable
debit inventory ; credit accounts payable
debit accounts payable; credit inventory
The inventory of a business will decrease when there are :
sales and sales returns
purchase and purchase returns
sales and purchase returns
purchase and sales returns
The cost of goods sold is determine and recorded when purchases and sales occur. This statement refer to
Periodic inventory system
Perpetual inventory system
Physical stock count will be made at the end of each accounting period to enable the determination of cost of goods sold. This statement is suitable for
Periodic inventory system
Perpetual inventory system
Inventory record will be updated continuously after each purchase or sale, these is an advantages of
Periodic inventory system
Perpetual inventory system
Inventory record will be updated monthly, quarterly or at the end of each accounting period. This statement suitable to explain
Periodic inventory system
Perpetual inventory system
Which inventory system is suitable to be used for the businesses with the high volume of products and with the several outlets.
Periodic inventory system
Perpetual inventory system
Which inventory system is suitable to be used for the small businesses with the low volume of products.
Periodic inventory system
Perpetual inventory system
Which of the following inventory costing method will value the ending inventory costs, closest to the current market value.
FIRST-IN, FIRST-OUT (FIFO)
LAST-IN, FIRST-OUT (LIFO)
WEIGHTED-AVERAGE
Which of the following inventory costing method will produce the lower profit during the inflation period.
FIRST-IN, FIRST-OUT (FIFO)
LAST-IN, FIRST-OUT (LIFO)
WEIGHTED-AVERAGE
Which of the following inventory costing method will produce the higher net profit during the inflation period.
FIRST-IN, FIRST-OUT (FIFO)
LAST-IN, FIRST-OUT (LIFO)
WEIGHTED-AVERAGE
Which of the following is suitable to explain the effects on inventory valuation on profit?
Ending inventory costs high → COGS high → Gross profit low
Ending inventory costs high → COGS low → Gross profit high
Ending inventory costs low → COGS low → Gross profit high
Ending inventory costs low → COGS high → Gross profit high
Ending inventory costs high → COGS low → Gross profit low
Which of the following inventory costing method will show the same ending inventory value for both inventory system?
FIRST-IN, FIRST-OUT (FIFO)
LAST-IN, FIRST-OUT (LIFO)
WEIGHTED-AVERAGE
In perpetual inventory system, what entries are made to record purchases of merchandise on account.
debit accounts payable ; credit purchases
debit purchases; credit accounts payable
debit inventory ; credit accounts payable
debit accounts payable; credit inventory
In periodic inventory system, what entries are made to record purchase returns.
debit accounts payable ; credit purchase returns
debit purchase returns; credit accounts payable
debit inventory ; credit accounts payable
debit accounts payable; credit inventory
In periodic inventory system, what entries are made to record purchases of merchandise on account.
debit accounts payable ; credit purchases
debit purchases; credit accounts payable
debit inventory ; credit accounts payable
debit accounts payable; credit inventory
In perpetual inventory system, what entries are made to record sales returns.
debit cost of goods sold ; credit inventory
debit sales returns; credit accounts receivable
debit inventory ; credit cost of goods sold
debit inventory; credit accounts receivable
debit sales returns; credit cost of goods sold
In periodic inventory system, what entries are made to record sales returns.
debit cost of goods sold ; credit inventory
debit sales returns; credit accounts receivable
debit inventory ; credit cost of goods sold
debit inventory; credit accounts receivable
debit sales returns; credit cost of goods sold
In perpetual inventory system, what entries are made to record sales of merchandise on accounts.
debit cost of goods sold ; credit inventory
debit accounts receivable; credit sales
debit inventory ; credit cost of goods sold
debit accounts receivable; credit inventory
debit sales; credit cost of goods sold
