Solution manual ADVANCED INTERMEDIATE ACCOUNTING PRACTICe.pdf

Solution manual
ADVANCED INTERMEDIATE ACCOUNTING
PRACTICe
SECTION A: INVENTORY & COST FLOW
(Q1–10)
1. FIFO is most beneficial during:​
A. Falling prices​
B. Rising prices​
C. Stable prices​
D. Zero inflation​
✔ Answer: B

2. LIFO results in:​
A. Lower COGS in rising prices​
B. Higher COGS in rising prices​
C. Higher inventory always​
D. No effect​
✔ Answer: B

3. Inventory shrinkage is recorded as:​
A. Revenue​
B. Expense​
C. Asset​
D. Equity​
✔ Answer: B

,4. Lower of cost or net realizable value reduces:​
A. Liabilities​
B. Assets​
C. Revenue​
D. Cash​
✔ Answer: B

5. Inventory turnover measures:​
A. Profitability​
B. Efficiency​
C. Liquidity only​
D. Debt​
✔ Answer: B

6. Perpetual system updates inventory:​
A. Annually​
B. Continuously​
C. Never​
D. Weekly only​
✔ Answer: B

7. Periodic system calculates COGS:​
A. Continuously​
B. End of period​
C. Daily​
D. Randomly​
✔ Answer: B

8. Net realizable value is:​
A. Selling price minus cost to sell​
B. Cost + profit​
C. Cash value​
D. Book value only​
✔ Answer: A

9. Inventory is classified as:​
A. Liability​
B. Asset​
C. Expense​
D. Equity​
✔ Answer: B

10. Weighted average cost reduces:​
A. Volatility in cost​
B. Revenue​

, C. Cash​
D. Liabilities​
✔ Answer: A




🔹 SECTION B: RECEIVABLES (Q11–20)
11. Accounts receivable is reported at:​
A. Face value​
B. Net realizable value​
C. Market value​
D. Cost only​
✔ Answer: B

12. Allowance for doubtful accounts is:​
A. Asset​
B. Contra asset​
C. Liability​
D. Expense​
✔ Answer: B

13. Bad debt expense follows:​
A. Matching principle​
B. Cash basis​
C. Revenue only​
D. Cost principle​
✔ Answer: A

14. Aging method is based on:​
A. Sales​
B. Time outstanding​
C. Inventory​
D. Cash​
✔ Answer: B

15. Direct write-off method violates:​
A. Matching principle​
B. Revenue recognition​
C. Cost principle​
D. GAAP​
✔ Answer: A