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WorksheetsTOPIC 8 (i) ACCOUNTING FOR INVENTORIES
Total questions: 10
Worksheet time: 7mins
In a manufacturing business, inventory that is ready for sale is called
raw materials inventory.
work in process inventory.
finished goods inventory.
store supplies inventory.
Beginning inventory plus the cost of goods purchased equals
cost of goods sold.
cost of goods available for sale.
net purchases.
total goods purchased.
Cost of goods sold is computed from the following equation:
beginning inventory – cost of goods purchased + ending inventory.
sales – cost of goods purchased + beginning inventory – ending inventory.
sales + gross profit – ending inventory + beginning inventory.
beginning inventory + cost of goods purchased – ending inventory.
The FIFO inventory method assumes that the cost of the first units purchased are
the last to be allocated to cost of goods sold.
the first to be allocated to ending inventory.
the first to be allocated to cost of goods sold.
not allocated to cost of goods sold or ending inventory.
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
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
A company purchased inventory as follows:
150 units at RM6
350 units at RM7
The average unit cost for inventory is
RM6.00.
RM6.50.
RM6.70.
RM7.00.
Elly Company uses a periodic inventory system. Details for the inventory account for the month of January, 2020 are as follows:
Units Per unit price Total
Balance, 1/1/2022 200 RM5.00 RM1,000
purchase, 15/1/2022 100 RM5.30 RM530
Purchase, 28/1/2022 100 RM5.50 RM550
An end of the month (1/31/20) inventory showed that 150 units were on hand. If the company uses FIFO, what is the value of the ending inventory?
RM750
RM805
RM850
RM825
Pasquale has the following inventory information.
July 1 Beginning Inventory 20 units at RM19 RM 380
7 Purchases 70 units at RM20 RM 1,400
22 Purchases 10 units at RM24 RM 240
A physical count of merchandise inventory on July 31 reveals that there are 30 units on hand. Using the average-cost method, the value of ending inventory is
RM585.
RM606.
RM630
RM660.
