1. Which if the following inventory method measures most closely the current inventory?
A. FIFO
B. Specific identification
C. Weighted average
D. LIFO
Answer: A. FIFO
More:
Which if the following inventory method measures most closely the current inventory?
2. Which inventory cost flow assumption would consistently results in the highest income in a period sustained inflation?
A. FIFO
B. LIFO
C. Weighted average
D. Specific identification
Answer: A. FIFO
More:
Which inventory cost flow assumption would consistently results in the highest income in a period sustained inflation?
3. In a period of falling prices, the use of which inventory cost flow method would typically result in the highest cost of goods sold?
A. FIFO
B. LIFO
C. Weighted average
D. Specific identification
Answer: A. FIFO
More:
In a period of falling prices, the use of which inventory cost flow method would typically result in the highest cost of goods sold?
4. In the period of rising prices, the inventory cost allocation that tends to result in the lowest reported net income is
A. FIFO
B. LIFO
C. Moving average
D. Weighted average
Answer: A. FIFO
More:
In the period of rising prices, the inventory cost allocation that tends to result in the lowest reported net income is
5. Which inventory cost flow assumption provides the best measure of earnings, where "best" means most appropriate for predicting future earnings, when prices have been declining?
A. FIFO
B. Specific identification
C. LIFO
D. Average cost
Answer: C. LIFO
More:
Which inventory cost flow assumption provides the best measure of earnings, where "best" means most appropriate for predicting future earnings, when prices have been declining?
6. Which method of inventory pricing best approximates specific identification of the actual flow of costs and units?
A. LIFO
B. FIFO
C. Moving average
D. Weighted average
Answer: B. FIFO
More:
Which method of inventory pricing best approximates specific identification of the actual flow of costs and units?
7. Cost of goods sold is the same under a periodic system as under a perpetual system when an entity uses
A. FIFO
B. LIFO
C. Weighted average
D. Specific identification
Answer: A. FIFO
More:
Cost of goods sold is the same under a periodic system as under a perpetual system when an entity uses
8. During periods of rising prices, when the FIFO inventory cost flow method is used, a perpetual inventory system would
A. Not be permitted
B. Result in a higher ending inventory than a periodic inventory system
C. Result in the same ending inventory as a periodic inventory system
D. Rsult in a lower ending inventory than a periodic inventory system
Answer: C. Result in the same ending inventory as a periodic inventory system
More:
During periods of rising prices, when the FIFO inventory cost flow method is used, a perpetual inventory system would
9. The inventory cost was lower using FIFO than LIFO. If there is no beginning inventory, what direction did the cost of purchases move during the period?
A. Up
B. Down
C. Steady
D. Cannot be determined
Answer: B. Down
More:
The inventory cost was lower using FIFO than LIFO. If there is no beginning inventory, what direction did the cost of purchases move during the period?
10. Assuming no beginning inventory, what can be said about the trend of inventory prices if cost of goods sold using the FIFO method exceeds cost of goods sold using the average cost method?
A. Prices decreased
B. Prices remained unchanged
C. Prices increased
D. Prices trend cannot be determined from the information
Answer: A. Prices decreased
11. IFRS prohibits which of the following cost flow assumptions?
A. LIFO
B. Specific identification
C. Weighted average
D. Any of these cost flow assumptions is allowed
Answer: A. LIFO
12. What is the inventory pricing procedure in which the oldest costs rarely have an effect on the ending inventory?
A. FIFO
B. LIFO
C. Specific identification
D. Weighted average
Answer: A. FIFO
13. In a period of declining prices, the inventory method which tends to give the highest amount of costs of goods sold is
A. Specific identification
B. Average cost
C. FIFO
D. LIFO
Answer: C. FIFO
14. In a period of falling prices, which inventory method generally provides lowest amount of ending inventory?
A. Weighted average
B. FIFO
C. Moving average
D. Specific identification
Answer: B. FIFO
15. In a period of falling prices, which inventory method generally provides the highest amount of net income?
A. Weighted average
B. Moving average
C. FIFO
D. LIFO
Answer: C. FIFO
16. The costing of inventory must be deferred until the end of reporting period under which of the following method of inventory valuation?
A. Moving average
B. Weighted average
C. LIFO perpetual
D. FIFO perpetual
Answer: B. Weighted average
17. The cost of inventories that are not ordinarily interchangeable and goods or services produced and segregated for specific projects shall be measured using
A. FIFO
B. Average method
C. LIFO
D. Specific identification
Answer: D. Specific identification
18. Which is the reason why specific identification method may be considered ideal for assigning cost to inventory and cost of goods sold!
A. The potential for manipulation of net income is reduced
B. There is no arbitrary allocation of cost
C. The cost flow matches the physical flow
D. It is applicable to all types of inventory
Answer: C. The cost flow matches the physical flow
19. Which of the following is likely to be a circumstances where the specific identification method can be used?
A. Unit price is low
B. Inventory turnover is low
C. Inventory quantities are large
D. All of the choices are likely circumstances
Answer: B. Inventory turnover is low
20. Which of the following cost flow assumptions is used for inventory when an entity builds townhouses?
A. FIFO
B. Specific identification
C. Weighted average
D. Any of these cost flow assumptions
Answer: B. Specific identification
