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ACC4356 Sample Exam 2 Key at End

1) The major issue in inventory accounting is: 1) A) determining whether to take inventory using cycle counts instead of counting all inventory only at the end of the year. B) deciding whether to maintain records on a periodic or perpetual basis. C) determining what goods to include in inventory. D) choosing the method for allocating goods available for sale to ending inventory and cost of goods sold. Topic: Allocate inventory and cost of goods sold 2) In an actual business, which of the following is an inventory accounting issue that frequently arises? 2) A) What items should be included in ending inventory?. B) What costs should be included in inventory purchases?. C) How should physical quantities in inventory be determined?. D) All of these answer choices are correct. Topic: Allocate inventory and cost of goods sold 3) The following information pertains to the Fan Company's inventory item B1008: March 1 Inventory Balance 400 units @ $ 3.10 5 Purchase 1,400 units @ $ 3.20 14 Purchase 280 units @ $ 3.25 31 Inventory Balance 520 units In a periodic inventory system, the LIFO cost of goods sold is: 3) A) $5,006. B) $4,993. C) $4,952. D) $4,967. Topic: Cost flow assumption—LIFO 1 4) The following information pertains to the Fan Company's inventory item B1008: March 1 Inventory Balance 400 units @ $ 3.10 5 Purchase 1,400 units @ $ 3.20 14 Purchase 280 units @ $ 3.25 31 Inventory Balance 520 units In a periodic inventory system, the ending LIFO inventory is: 4) A) $1,624. B) $1,678. C) $1,655. D) $1,733. Topic: Cost flow assumption—LIFO