Name: __________________________
ACG 301
Chapter 8 Quiz
Fall 2011
1. When using a perpetual inventory system,
A)
no Purchases account is used.
B)
a Cost of Goods Sold account is used.
C)
two entries are required to record a sale.
D)
all of these.
2. Why are inventories included in the computation of net income?
A)
To determine cost of goods sold.
B)
To determine sales revenue.
C)
To determine merchandise returns.
D)
Inventories are not included in the computation of net income.
3. Goods in transit which are shipped f.o.b. shipping point should be
A)
included in the inventory of the seller.
B)
included in the inventory of the buyer.
C)
included in the inventory of the shipping company.
D)
none of these.
4. Chess Top uses the periodic inventory system. For the current month, the beginning inventory consisted of 300 units
that cost $65 each. During the month, the company made two purchases: 450 units at $68 each and 225 units at $70
each. Chess Top also sold 750 units during the month. Using the FIFO method, what is the amount of cost of goods sold
for the month?
A)
$50,655.
B)
$48,750.
C)
$51,225.
D)
$50,100.
5. Gross Corporation adopted the dollar-value LIFO method of inventory valuation on December 31, 2011. Its inventory
at that date was $440,000 and the relevant price index was 100. Information regarding inventory for subsequent years is
as follows:
Inventory at
Current
Date
Current Prices
Price Index
December 31, 2012
$513,600
107
December 31, 2013
580,000
125
December 31, 2014
650,000
130
What is the cost of the ending inventory at December 31, 2014 under dollar-value LIFO?
A)
$512,480.
B)
$509,600.
C)
$500,000.
D)
$526,800.
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