Question 1

Match each description to the appropriate cost flow assumption (a-d).
-Cost flow is in the order in which the costs were incurred.
A)Weighted average
B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification

Accepted Answer

FIFO (First-in, first-out) assumes that the costs are recognized in the order they were incurred, meaning the oldest costs are recognized first.

Question 2

Match each description to the appropriate document used for inventory control (a-c).
-authorizes the purchase of inventory from an approved vendor
A)Receiving report
B)Vendor's invoice
C)Purchase order

Accepted Answer

The answer of Match each description to the appropriate document...

Question 3

Match each description to the appropriate cost flow assumption (a-c).
-Assigns the same value to all inventory units
A)FIFO
B)LIFO
C)Weighted average

Accepted Answer

Weighted average assumes that all inventory units have the same value by taking the total cost of goods available for sale and dividing it by the total number of units available for sale. This results in a weighted average cost per unit that is assigned to inventory.

Question 4

Match each description to the appropriate cost flow assumption (a-c).
-Produces results that are similar to the specific identification method
A)FIFO
B)LIFO
C)Weighted average

Accepted Answer

FIFO (First-In, First-Out) produces results that are similar to the specific identification method because it assumes that the first items purchased are the first ones sold, which closely aligns with tracking each item individually as in specific identification.

Question 5

Match each description to the appropriate inventory system (a or b).​
-Average cost is rarely used with this system.
A)Perpetual
B)Periodic

Accepted Answer

Average cost works best with a perpetual inventory system, where inventory is constantly tracked and updated. Periodic inventory systems rely on physical counts and calculations at set intervals, making it difficult to accurately assess average cost.

Question 6

Match each description to the appropriate document used for inventory control (a-c).
-last document in the chain, use to compare all three for accuracy
A)Receiving report
B)Vendor's invoice
C)Purchase order

Accepted Answer

The answer of Match each description to the appropriate document...

Question 7

Match each description to the appropriate inventory system (a or b).​
-This system can be costly and time consuming if not computerized.
A)Perpetual
B)Periodic

Accepted Answer

Perpetual inventory system is computerized and updates inventory records in real-time. This helps in minimizing errors and reducing the cost and time involved in manual tracking of inventory.

Question 8

Match each description to the appropriate cost flow assumption (a-c).
-Produces the same cost of goods sold under both the periodic and the perpetual inventory systems
A)FIFO
B)LIFO
C)Weighted average

Accepted Answer

The answer of Match each description to the appropriate cost...

Question 9

If a company values inventory at the lower of cost or market, which of the following is the value of inventory on the balance sheet? Apply the lower-of-cost-or-market method to inventory as a whole. 
A)$6,960
B)$7,700
C)$6,540
D)$7,280

Accepted Answer

The answer of If a company values inventory at the...

Question 10

Match each description to the appropriate inventory system (a or b).​
-Under this system, only revenue is recorded when sales are made.
A)Perpetual
B)Periodic

Accepted Answer

The description matches the Periodic inventory system, where revenue is recorded only at the end of the accounting period, and the cost of goods sold is calculated based on a physical count of inventory. In contrast, the Perpetual inventory system updates inventory and cost of goods sold in real-time with every transaction.

Question 11

Match each description to the appropriate cost flow assumption (a-d).
-Cost flow is assumed to be in the reverse order of costs incurred.
A)Weighted average
B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification

Accepted Answer

LIFO (Last-in, first-out) assumes that the most recently incurred costs are the first to be recognized in determining cost of goods sold, which matches the description of cost flow being in the reverse order of costs incurred.

Question 12

Match each description to the appropriate cost flow assumption (a-c).
-Never results in either the highest or lowest possible net income
A)FIFO
B)LIFO
C)Weighted average

Accepted Answer

The weighted average cost flow assumption takes into account both the cost and quantity of inventory purchased during a period. This results in a cost of goods sold and ending inventory value that falls in between the values calculated using FIFO and LIFO. Therefore, it never results in either the highest or lowest possible net income.

Question 13

Match each description to the appropriate cost flow assumption (a-d).
-The cost of the units sold and in ending inventory is a weighted average of the purchase costs.
A)Weighted average
B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification

Accepted Answer

The description matches with the weighted average cost flow assumption where the cost of the units sold and in ending inventory is a weighted average of the purchase costs.

Question 14

Match each description to the appropriate inventory system (a or b).​
-When using this system, a physical inventory is necessary to determine cost of goods sold.
A)Perpetual
B)Periodic

Accepted Answer

The answer of Match each description to the appropriate inventory...

Question 15

Match each description to the appropriate cost flow assumption (a-c).
-Produces the highest gross profit when costs are decreasing
A)FIFO
B)LIFO
C)Weighted average

Accepted Answer

LIFO assumes that the most recent inventory purchases are sold first, which results in higher cost of goods sold and lower ending inventory when costs are increasing. However, when costs are decreasing, LIFO produces the highest gross profit because the older, lower cost inventory is being sold first, resulting in a lower cost of goods sold and a higher ending inventory value.

Question 16

Match each description to the appropriate document used for inventory control (a-c).
-establishes an initial record of the receipt of inventory
A)Receiving report
B)Vendor's invoice
C)Purchase order

Accepted Answer

The answer of Match each description to the appropriate document...

Question 17

Match each description to the appropriate cost flow assumption (a-c).
-Rarely used with a perpetual inventory system
A)FIFO
B)LIFO
C)Weighted average

Accepted Answer

The answer of Match each description to the appropriate cost...

Question 18

Match each description to the appropriate cost flow assumption (a-d).
-Cost flow matches the unit sold to the unit purchased.
A)Weighted average
B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification

Accepted Answer

Specific identification matches the cost of the unit sold to the cost of the specific unit purchased, allowing for precise tracking of inventory costs.

Question 19

Match each description to the appropriate cost flow assumption (a-c).
-Produces the highest ending inventory when costs are increasing
A)FIFO
B)LIFO
C)Weighted average

Accepted Answer

FIFO assumes that the first inventory purchased is the first sold, meaning that the ending inventory includes the most recently purchased inventory. In times of rising costs, this results in a higher ending inventory value.

Question 20

Match each description to the appropriate cost flow assumption (a-c).
-Widely used for tax purposes
A)FIFO
B)LIFO
C)Weighted average

Accepted Answer

LIFO (Last-In, First-Out) is widely used for tax purposes because it can reduce taxable income in times of inflation by matching the most recent higher costs against current revenues.

Quiz 6: Inventories

Match each description to the appropriate cost flow assumption (a-d). -Cost flow is in the order in which the costs were incurred. A)Weighted average B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification

Match each description to the appropriate document used for inventory control (a-c). -authorizes the purchase of inventory from an approved vendor A)Receiving report B)Vendor's invoice C)Purchase order

Match each description to the appropriate cost flow assumption (a-c). -Assigns the same value to all inventory units A)FIFO B)LIFO C)Weighted average

Match each description to the appropriate cost flow assumption (a-c). -Produces results that are similar to the specific identification method A)FIFO B)LIFO C)Weighted average

Match each description to the appropriate inventory system (a or b). -Average cost is rarely used with this system. A)Perpetual B)Periodic

Match each description to the appropriate document used for inventory control (a-c). -last document in the chain, use to compare all three for accuracy A)Receiving report B)Vendor's invoice C)Purchase order

Match each description to the appropriate inventory system (a or b). -This system can be costly and time consuming if not computerized. A)Perpetual B)Periodic

Match each description to the appropriate cost flow assumption (a-c). -Produces the same cost of goods sold under both the periodic and the perpetual inventory systems A)FIFO B)LIFO C)Weighted average

If a company values inventory at the lower of cost or market, which of the following is the value of inventory on the balance sheet? Apply the lower-of-cost-or-market method to inventory as a whole.

Match each description to the appropriate inventory system (a or b). -Under this system, only revenue is recorded when sales are made. A)Perpetual B)Periodic

Match each description to the appropriate cost flow assumption (a-d). -Cost flow is assumed to be in the reverse order of costs incurred. A)Weighted average B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification

Match each description to the appropriate cost flow assumption (a-c). -Never results in either the highest or lowest possible net income A)FIFO B)LIFO C)Weighted average

Match each description to the appropriate cost flow assumption (a-d). -The cost of the units sold and in ending inventory is a weighted average of the purchase costs. A)Weighted average B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification

Match each description to the appropriate inventory system (a or b). -When using this system, a physical inventory is necessary to determine cost of goods sold. A)Perpetual B)Periodic

Match each description to the appropriate cost flow assumption (a-c). -Produces the highest gross profit when costs are decreasing A)FIFO B)LIFO C)Weighted average

Match each description to the appropriate document used for inventory control (a-c). -establishes an initial record of the receipt of inventory A)Receiving report B)Vendor's invoice C)Purchase order

Match each description to the appropriate cost flow assumption (a-c). -Rarely used with a perpetual inventory system A)FIFO B)LIFO C)Weighted average

Match each description to the appropriate cost flow assumption (a-d). -Cost flow matches the unit sold to the unit purchased. A)Weighted average B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification

Match each description to the appropriate cost flow assumption (a-c). -Produces the highest ending inventory when costs are increasing A)FIFO B)LIFO C)Weighted average

Match each description to the appropriate cost flow assumption (a-c). -Widely used for tax purposes A)FIFO B)LIFO C)Weighted average

Quiz 6: Inventories

Match each description to the appropriate cost flow assumption (a-d). -Cost flow is in the order in which the costs were incurred. A)Weighted average B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification

Match each description to the appropriate document used for inventory control (a-c). -authorizes the purchase of inventory from an approved vendor A)Receiving report B)Vendor's invoice C)Purchase order

Match each description to the appropriate cost flow assumption (a-c). -Assigns the same value to all inventory units A)FIFO B)LIFO C)Weighted average

Match each description to the appropriate cost flow assumption (a-c). -Produces results that are similar to the specific identification method A)FIFO B)LIFO C)Weighted average

Match each description to the appropriate inventory system (a or b).​ -Average cost is rarely used with this system. A)Perpetual B)Periodic

Match each description to the appropriate document used for inventory control (a-c). -last document in the chain, use to compare all three for accuracy A)Receiving report B)Vendor's invoice C)Purchase order

Match each description to the appropriate inventory system (a or b).​ -This system can be costly and time consuming if not computerized. A)Perpetual B)Periodic

Match each description to the appropriate cost flow assumption (a-c). -Produces the same cost of goods sold under both the periodic and the perpetual inventory systems A)FIFO B)LIFO C)Weighted average

If a company values inventory at the lower of cost or market, which of the following is the value of inventory on the balance sheet? Apply the lower-of-cost-or-market method to inventory as a whole.

Match each description to the appropriate inventory system (a or b).​ -Under this system, only revenue is recorded when sales are made. A)Perpetual B)Periodic

Match each description to the appropriate cost flow assumption (a-d). -Cost flow is assumed to be in the reverse order of costs incurred. A)Weighted average B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification

Match each description to the appropriate cost flow assumption (a-c). -Never results in either the highest or lowest possible net income A)FIFO B)LIFO C)Weighted average

Match each description to the appropriate cost flow assumption (a-d). -The cost of the units sold and in ending inventory is a weighted average of the purchase costs. A)Weighted average B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification

Match each description to the appropriate inventory system (a or b).​ -When using this system, a physical inventory is necessary to determine cost of goods sold. A)Perpetual B)Periodic

Match each description to the appropriate cost flow assumption (a-c). -Produces the highest gross profit when costs are decreasing A)FIFO B)LIFO C)Weighted average

Match each description to the appropriate document used for inventory control (a-c). -establishes an initial record of the receipt of inventory A)Receiving report B)Vendor's invoice C)Purchase order

Match each description to the appropriate cost flow assumption (a-c). -Rarely used with a perpetual inventory system A)FIFO B)LIFO C)Weighted average

Match each description to the appropriate cost flow assumption (a-d). -Cost flow matches the unit sold to the unit purchased. A)Weighted average B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification

Match each description to the appropriate cost flow assumption (a-c). -Produces the highest ending inventory when costs are increasing A)FIFO B)LIFO C)Weighted average

Match each description to the appropriate cost flow assumption (a-c). -Widely used for tax purposes A)FIFO B)LIFO C)Weighted average

Match each description to the appropriate inventory system (a or b). -Average cost is rarely used with this system. A)Perpetual B)Periodic

Match each description to the appropriate inventory system (a or b). -This system can be costly and time consuming if not computerized. A)Perpetual B)Periodic

Match each description to the appropriate inventory system (a or b). -Under this system, only revenue is recorded when sales are made. A)Perpetual B)Periodic

Match each description to the appropriate inventory system (a or b). -When using this system, a physical inventory is necessary to determine cost of goods sold. A)Perpetual B)Periodic