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Inventory Methods

5 Questions
Industry Quizzes & Trivia

Multiple Choice Quiz Inventory Methods

Questions and Answers
  • 1. 
    The inventory costing method that is based on the assumption that cost should be charged against revenue in the order in which they were incurred.
    • A. 

      Fifo

    • B. 

      Lifo

    • C. 

      Average cost

  • 2. 
    The inventory costing method that charges the most recent costs incurred against revenue
    • A. 

      Lifo

    • B. 

      Average cost

    • C. 

      Fifo

  • 3. 
    The following units of a particular item were purchased and sold during the period:What is the cost of the 35 units on hand at the end of the period as determined under the perpetual inventory system by the lifo costing method
    Beginning inventory 40 units at P20
    First purchase 50 units at P21
    Second purchase 50 units at P22
    First sale 110 units
    Third purchase 50 units at 23
    Second sale 45 units
    • A. 

      715

    • B. 

      705

    • C. 

      700

    • D. 

      805

  • 4. 
    The following units of a particular item were purchased and sold during the period:
    Beginning inventory 40 units at P20
    First purchase 50 units at P21
    Second purchase 50 units at P22
    First sale 110 units
    Third purchase 50 units at 23
    Second sale 45 units
    What is the cost of the 35 units on hand at the end of the period as determined under the periodic inventory system by the fifo costing method
    • A. 

      P20

    • B. 

      P21

    • C. 

      P22

    • D. 

      P23

  • 5. 
    If the merchandise inventory is being valued at cost and the price level is steadily rising,the method of costing that will yield the highest net income is:
    • A. 

      Lifo

    • B. 

      Fifo

    • C. 

      Average cost