Accounting Exam 2 Review

5 Questions | By Lekden8 | Updated: Mar 22, 2022 | Attempts: 637

Exams give everyone a thought that they are not fully prepared. Having done a mock exam in class in preparation for the finals this review questions cover some concepts that you should ensure you understand fully. Give it a try and all the best as you revise for the finals.

Questions and Answers

1.

If goods in transit are shipped FOB destination,
- A.
  
  The buyer has title to the goods until they are delivered.
- B.
  
  The seller has title to the goods until they are delivered.
- C.
  
  The shipper has title to the goods while they are in transit.
- D.
  
  No one has title to the goods until they are delivered.
2.

If beginning inventory is understated by $10,000, the effect of this error in the current period is: Cost of Goods Sold Net Income
- A.
  
  Understated Understated
- B.
  
  Overstated Overstated
- C.
  
  Understated Overstated
- D.
  
  Overstated Understated
3.

Which of the following companies would most like have the highest inventory turnover?
- A.
  
  A bakery.
- B.
  
  An art gallery.
- C.
  
  A car dealer.
- D.
  
  A piano manufacturer.
4.

Which method of inventory costing is prohibited under IFRS?
- A.
  
  FIFO.
- B.
  
  LIFO
- C.
  
  Specific identification.
- D.
  
  Average cost.
5.

An assumption about inventory cost flow is necessary:
- A.
  
  Because inventory costs change and tracking which units actually sold is difficult.
- B.
  
  Because cost flow must follow the physical flow of the inventory.
- C.
  
  Because average days in inventory must be computed.
- D.
  
  So as to compute total operating expenses.