Acct 211 Quiz 2

Jul 25th, 2016
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1. When purchase costs of inventory regularly decline, which method of inventory costing will yield the lowest cost of goods sold? FIFO. LIFO. Weighted average. Specific identification. Gross margin. 2. Some companies choose to avoid assigning incidental costs of acquiring merchandise to inventory by recording them as expenses when incurred. The argument that supports this is called: The matching principle. The materiality constraint. The cost principle. The conservation constraint principle. The lower of cost or market principle. 3. An error in the period-end inventory causes an offsetting error in the next period and therefore: Managers can ignore the error. It is sometimes said to be self-correcting. It affects only income statement accounts. If affects only balance sheet accounts. Is immaterial for managerial decision making. 4. Management decisions in accounting for inventory cost include all of the following except: Costing method. Inventory system (perpetual or

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Acct 211 Quiz 21. When purchase costs of inventory regularly decline, which method of inventory costing willyield the lowest cost of goods sold?FIFO.LIFO.Weighted average.Specific identification.Gross margin.2. Some companies choose to avoid assigning incidental costs of acquiring merchandise toinventory by recording them as expenses when incurred. The argument that supports this iscalled:The matching principle.The materiality constraint.The cost principle.The conservation constraint principle.The lower of cost or market principle.3. An error in the period-end inventory causes an offsetting error in the next period andtherefore:Managers can ignore the error.It is sometimes said to be self-correcting.It affects only income statement accounts.If affects only balance sheet accounts.Is immaterial for managerial decision making.4. Management decisions in accounting for inventory cost include all of the following except:Costing method.Inventory system (perpetual or periodic).Customer demand for inventory.Use of market values or other estimates.Items included in inventory and their costs.5. Generally accepted accounting principles require that the inventory of a company be reportedat:Market value.Historical cost.Lower of cost or market.Replacement cost.Retail value.6. In applying the lower of cost or market method to inventory valuation, market is defined as:Historical cost.Current replacement cost.Current sales price.FIFO.LIFO.7. The inve

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