QUIZ.CH5.6
1Multiple Choice Question 54
Cost of goods sold is determined only at the end of the accounting period in
neither a perpetual nor a periodic inventory system.
a perpetual inventory system.
a periodic inventory system.
both a perpetual and a periodic inventory system
2Multiple Choice Question 92
A sales invoice is a source document that
provides evidence of incurred operating expenses.
provides evidence of credit sales.
serves only as a customer receipt.
provides support for goods purchased for resale.
3Multiple Choice Question 149
Financial information is presented below:
Operating Expenses
Sales Returns and Allowances
Sales Discounts
Sales Revenue
Cost of Goods Sold
The gross profit rate would be
.503.
.363.
.400.
.456.
$ 45,000
9,000
6,000
160,000
87,000
4Multiple Choice Question 96
The Sales Returns and Allowances account is classified as a(n)
contra revenue account.
contra asset account.
expense account.
asset account.
5Multiple Choice Question 179
On October 4, 2013, JT Corporation had credit sales transactions of $3,200 from merchandise having cost
$1,900. The entries to record the day's credit transactions include a
credit of $1,900 to Cost of Goods Sold.
credit of $3,200 to Sales Revenue.
debit of $1,900 to Inventory.
debit of $3,200 to Inventory.
6IFRS Multiple Choice Question 257
Comprehensive income under IFRS
excludes unrealized gains and losses included in net income, in contrast to GAAP.
includes unrealized gains and losses included in net income, similar to GAAP.
excludes unrealized gains and losses included in net income, similar to GAAP.
includes unrealized gains and losses included in net income, in contrast to GAAP
7Multiple Choice Question 134
If a company has net sales of $700,000 and cost of goods sold of $490,000, the gross profit percentage is
30%.
70%.
100%.
15%.
8Multiple Choice Question 118
The consistent application of an inventory costing method is essential for
accuracy.
efficiency.
comparability.
conservatism.
9Multiple Choice Question 168
The inventory turnover ratio is computed by dividing cost of goods sold by
beginning inventory.
ending inventory.
average inventory.
365 days.
10Multiple Choice Question 126
Switzer, Inc. has 5 computers which have been part of the inventory for over two years. Each computer cost
$600 and originally retailed for $900. At the statement date, each computer has a current replacement cost
of $400. How much loss should Switzer, Inc., record for the year?
$2,000.
$2,500.
$1,000.
$1,500.
11Multiple Choice Question 72
Which one of the following inventory methods is often impractical to use?
LIFO
FIFO
Specific identification
Average cost
12 Multiple Choice Question 132
Overstating ending inventory will overstate all of the following except
net income.
owner's equity.
assets.
cost of goods sold.
13IFRS Multiple Choice Question 232
Under IFRS, companies can choose which inventory system?
LIFO
FIFO
Yes
No
Yes
Yes
No
Yes
No
No
14Multiple Choice Question 123
The lower-of-cost-or-market (LCM) basis may be used with all of the following methods except
FIFO.
LIFO.
The LCM basis may be used with all of these.
average cost.
15Multiple Choice Question 161
Inventory items on an assembly line in various stages of production are classified as
Raw materials.
Merchandise inventory.
Finished goods.
Work in process.