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Exam study book Financial Reporting and Analysis of Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt - ISBN: 9780073527093
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Test Bank For Financial Reporting & Analysis 8ed By Revsine,collins,johnson,mittelstaedt & Soffer Mkt.
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TEST BANK FOR FINANCIAL REPORTING AND ANALYSIS 8TH EDITION REVSINE
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Solution Manual for Financial Reporting and Analysis 8th Edition by Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
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ACC4356 Sample Exam 2 Key atEnd
, ACC4356 Sample Exam 2 Key at End 2022
ACC 4356 Sample Exam 2
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the
question.
1) The major issue in inventory accounting is: 1)
A) determining whether to take inventory using cycle counts instead of counting all
inventory only at the end of the year.
B) deciding whether to maintain records on a periodic or perpetual basis.
C) determining what goods to include in inventory.
D) choosing the method for allocating goods available for sale to ending inventory
and cost of goods sold.
Topic: Allocate inventory and cost of goods sold
2) In an actual business, which of the following is an inventory accounting issue that 2)
frequently arises?
A) What items should be included in ending inventory?.
B) What costs should be included in inventory purchases?.
C) How should physical quantities in inventory be determined?.
D) All of these answer choices are correct.
Topic: Allocate inventory and cost of goods sold
3) The following information pertains to the Fan Company's inventory item B1008: 3)
March 1 Inventory Balance 400 units @ $ 3.10
5 Purchase 1,400 units @ $ 3.20
14 Purchase 280 units @ $ 3.25
31 Inventory Balance 520 units
In a periodic inventory system, the LIFO cost of goods sold is:
A) $5,006.
B) $4,993.
C) $4,952.
D) $4,967.
Topic: Cost flow assumption—LIFO
1
,4) The following information pertains to the Fan Company's inventory item B1008: 4)
March 1 Inventory Balance 400 units @ $ 3.10
5 Purchase 1,400 units @ $ 3.20
14 Purchase 280 units @ $ 3.25
31 Inventory Balance 520 units
In a periodic inventory system, the ending LIFO inventory is:
A) $1,624.
B) $1,678.
C) $1,655.
D) $1,733.
Topic: Cost flow assumption—LIFO
5) The following information pertains to the Fan Company's inventory item B1008: 5)
March 1 Inventory Balance 400 units @ $ 3.10
5 Purchase 1,400 units @ $ 3.20
14 Purchase 280 units @ $ 3.25
31 Inventory Balance 520 units
In a periodic inventory system, the ending FIFO inventory is
A) $1,655.
B) $1,624.
C) $1,678.
D) $1,733.
Topic: Cost flow assumption—FIFO
6) The following information pertains to the Fan Company's inventory item B1008: 6)
March 1 Inventory Balance 400 units @ $ 3.10
5 Purchase 1,400 units @ $ 3.20
14 Purchase 280 units @ $ 3.25
31 Inventory Balance 520 units
In a periodic inventory system, the FIFO cost of goods sold is
A) $4,993.
B) $4,952.
C) $4,967.
D) $5,006.
Topic: Cost flow assumption—FIFO
2
, 7) Financial analysts recognize that the deficiency of the FIFO cost flow assumption is the 7)
failure to:
A) match oldest costs with oldest revenues.
B) match current costs with oldest revenues.
C) match oldest costs with current revenues.
D) match current costs with current revenues.
Topic: Cost flow assumption—FIFO
8) The carrying cost of inventory should include all the following costs except: 8)
A) purchase costs.
B) general administrative costs associated with the purchase of inventory.
C) sales taxes and transportation costs paid by the purchaser.
D) insurance and storage costs.
Topic: Costs and items included in inventory
9) Goods held on consignment are included in the inventory valuation of: 9)
A) the consignee.
B) both the consignor and the consignee.
C) neither the consignor nor the consignee.
D) the consignor.
Topic: Costs and items included in inventory
10) The size of the divergence between FIFO cost of goods sold and replacement cost of 10)
goods sold depends on the rapidity of the inventory turnover and the:
A) divergence of total asset turnover from previous periods.
B) change in accounts receivable turnover.
C) severity of input cost change.
D) rapidity of fixed asset turnover.
Topic: FIFO holding gains—Replacement cost
11) Which of the following statements regarding inventory accounting is false? 11)
A) Both U.S. GAAP and IFRS apply lower of cost or market in the same manner
when accounting for inventory.
B) Since the use of LIFO is not allowed under IFRS, inventory holding gains are
included in income.
C) IFRS requires the use of absorption costing.
D) IFRS permits inventory reductions due to lower of cost or market writedowns to
be reversed if the market recovers.
Topic: IFRS inventory accounting; Dollar-value LIFO
3
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