You are on page 1of 6

ACC 304 Week 2 Quiz 01 Chapter 8

Multiple Choice Question 103


Transactions for the month of June were:
Purchases
(balance) 1,600 @
4,400 @
2,400 @
3,600 @
1,000 @

June 1
3
7
15
22

$3.20
3.10
3.30
3.40
3.50

June 2
6
9
10
18
25

Sales
1,200 @
3,200 @
2,000 @
800 @
2,800 @
400 @

$5.50
5.50
5.50
6.00
6.00
6.00

Assuming that perpetual inventory records are kept in units only, the ending inventory on a
LIFO basis is
o
o
o
o

$8,220.
$8,320.
$8,940.
$8,580.

Multiple Choice Question 23


Under what circumstances should a company with high rate of return on sales consider the
inventory sold?
o
o
o
o

When the retailer gives a confirmation that the goods wont be returned
When the goods are sold on installment
When the payment for goods is received
When it can reasonably estimate the amount of returns

Multiple Choice Question 100


Niles Co. has the following data related to an item of inventory:
Inventory, March 1
Purchase, March 7
Purchase, March 16
Inventory, March 31

200 units @ $2.10


700 units @ $2.20
140 units @ $2.25
260 units

The value assigned to ending inventory if Niles uses LIFO is


Page 1 of 6

ACC 304 Week 2 Quiz 01 Chapter 8


o
o
o
o

$580
$552
$584
$546

Multiple Choice Question 77


Which of the following statements is true about specific-goods pooled LIFO approach?
o It determines and measures any increases and decreases in a pool in terms of total
dollar value
o The reduction of one quantity in the pool may be offset by an increase in another
o It usually results in large LIFO liquidation
o Most companies using a LIFO system prefer specific-goods pooled LIFO
approach over dollar-value LIFO

Multiple Choice Question 30


What is consigned inventory?
o
o
o
o

Goods that are sold, but payment is not required until the goods are sold.
Goods that are shipped, but title remains with the shipper.
Goods that have been segregated for shipment to a customer.
Goods that are shipped, but title transfers to the receiver.

Multiple Choice Question 145


Keck Co. had 150 units of product A on hand at January 1, 2014, costing $21 each.
Purchases of product A during January were as follows:
Date
Jan. 10
18
28

Units
200
250
100

Unit Cost
$22
23
24

A physical count on January 31, 2014 shows 200 units of product A on hand. The cost of the
inventory at January 31, 2014 under the LIFO method is
o $4,250.
o $4,100.
Page 2 of 6

ACC 304 Week 2 Quiz 01 Chapter 8


o $4,700.
o $4,450.

Multiple Choice Question 75


What is a LIFO reserve?
o Change in the LIFO inventory during the year.
o The tax savings attributed to using the LIFO method.
o The difference between the LIFO inventory and the amount used for internal
reporting purposes.
o The current effect of using LIFO on net income.

Multiple Choice Question 128


Wise Company adopted the dollar-value LIFO method on January 1, 2014, at which time
its inventory consisted of 6,000 units of Item A @ $5.00 each and 3,000 units of Item B @
$16.00 each. The inventory at December 31, 2014 consisted of 12,000 units of Item A and
7,000 units of Item B. The most recent actual purchases related to these items were as
follows:
Items
A
A
B

Purchase Date
12/7/14
12/11/14
12/15/14

Quantity
Purchased
2,000
10,000
7,000

Cost Per Unit


$ 6.00
5.75
17.00

Using the double-extension method, what is the price index for 2014 that should be
computed by Wise Company?
o
o
o
o

108.33%
109.59%
111.05%
220.51%

Multiple Choice Question 25


Which of the following is a characteristic of a perpetual inventory system?
o Cost of goods sold is recorded with each sale.
Page 3 of 6

ACC 304 Week 2 Quiz 01 Chapter 8


o Cost of goods sold is determined as the amount of purchases less the change in
inventory.
o Inventory purchases are debited to a Purchases account.
o Inventory records are not kept for every item.

Multiple Choice Question 69


In a period of rising prices, the inventory method which tends to give the highest reported
cost of goods sold is
o
o
o
o

FIFO.
LIFO.
None of these choices are correct.
Average cost.

Multiple Choice Question 104


Transactions for the month of June were:
Purchases
(balance) 1,600 @
4,400 @
2,400 @
3,600 @
1,000 @

June 1
3
7
15
22

$3.20
3.10
3.30
3.40
3.50

June 2
6
9
10
18
25

Sales
1,200 @
3,200 @
2,000 @
800 @
2,800 @
400 @

$5.50
5.50
5.50
6.00
6.00
6.00

Assuming that perpetual inventory records are kept in dollars, the ending inventory on a
LIFO basis is
o
o
o
o

$8,580.
$8,220.
$8,940.
$8,320.

Multiple Choice Question 35


During 2014 Carne Corporation transferred inventory to Nolan Corporation and agreed to
repurchase the merchandise early in 2015. Nolan then used the inventory as collateral to
Page 4 of 6

ACC 304 Week 2 Quiz 01 Chapter 8


borrow from Norwalk Bank, remitting the proceeds to Carne. In 2015 when Carne
repurchased the inventory, Nolan used the proceeds to repay its bank loan.
This transaction is known as a(n)
o
o
o
o

Assignment for the benefit of creditors.


Installment sale.
Product financing arrangement.
Consignment.

Multiple Choice Question 140


Walsh Retailers purchased merchandise with a list price of $125,000, subject to trade
discounts of 20% and 10%, with no cash discounts allowable. Walsh should record the cost
of this merchandise as
o
o
o
o

$97,500.
$87,500.
$125,000.
$90,000.

Multiple Choice Question 32


Goods in transit which are shipped f.o.b. shipping point should be
o
o
o
o

Included in the inventory of the seller.


Included in the inventory of the shipping company.
Included in the inventory of the buyer.
None of these answer choices are correct.

Multiple Choice Question 64


Which method of inventory pricing best approximates specific identification of the actual
flow of costs and units in most manufacturing situations?
o
o
o
o

Average cost
Base stock
First-in, first-out
Last-in, first-out

Page 5 of 6

ACC 304 Week 2 Quiz 01 Chapter 8

Page 6 of 6

You might also like