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.
Recent Comments