ACCT212 Week 4 Quiz Latest 2017 November (all correct answers)

Question 1

3 / 3 pts

(TCO 4) The cost of the inventory that the business has sold to customers is called

inventory.

cost of goods sold.

purchases.

gross profit.

Question 2

3 / 3 pts

(TCO 4) Another term for gross profit is

gross income.

gross sales.

gross margin.

gross operating income.

Question 3

3 / 3 pts

(TCO 4) A small _____ would most likely use a perpetual inventory system.

automobile dealership

fabric store

restaurant

flower shop

Question 4

3 / 3 pts

(TCO 4) All of the following costs would be included in inventory except for

freight-in.

income taxes.

taxes paid on the purchase price.

insurance while in transit.

Question 5

3 / 3 pts

(TCO 4) If the cost to purchase a unit of inventory does not change, ending inventory

will be the highest under FIFO.

will be the highest under LIFO.

cannot be computed using the average-cost method.

will be the same under LIFO and FIFO.

Question 6

3 / 3 pts

(TCO 4) When inventory prices are increasing, the FIFO costing method will generally yield a cost of goods sold that is

higher than cost of goods sold under the LIFO method.

lower than cost of goods sold under the LIFO method.

equal to the gross profit under the LIFO method.

equal to cost of goods sold under the LIFO method.

Question 7

3 / 3 pts

(TCO 4) When comparing the results of LIFO and FIFO when inventory costs are decreasing

cost of goods sold will be the lowest using FIFO.

ending inventory will be the highest using FIFO.

cost of goods sold will be the highest using LIFO.

ending inventory will be the highest using LIFO.

Question 8

3 / 3 pts

(TCO 4) The disclosure principle states that a company should report _____ and _____ information about itself.

material, relevant

important, conservative

representational faithful, financial

relevant, representational faithful

Question 9

3 / 3 pts

(TCO 4) When applying the lower-of-cost-or-market rule, market value generally refers to

FIFO cost using the periodic method.

LIFO cost using the periodic method.

current sales price of the inventory.

current replacement cost of the inventory.

Question 10

3 / 3 pts

(TCO 4) A gross profit margin of 30% means that

for each dollar of sales, the company has a cost of goods sold of seventy cents.

for each dollar of sales, the company has a gross profit of thirty cents.

for each dollar of sales, the company has a cost of goods sold of thirty cents.

both A and B are true.