ACC101 Full Test with Accurate
Solutions
QN=1 Merchandise inventory includes:
a. All goods owned by a company and held for sale.
b. All goods in transit.
c. All goods on consignment.
d. Only damaged goods.
e. All goods in the stores of company. - ANSWER-A
QN=2 Costs included in the Merchandise Inventory account can include:
a. Invoice price minus any discount.
b. Transportation-in.
c. Storage.
d. Insurance.
e. All of these. - ANSWER-E
QN=3 During a period of steadily rising costs, the inventory valuation method that yields
the lowest reported net income is:
a. Specific identification method.
b. Average cost method.
c. Weighted-average method.
d. FIFO method.
e. LIFO method. - ANSWER-E
QN=4 The inventory valuation method that results in the lowest taxable income in a
period of inflation is:
a. LIFO method.
b. FIFO method.
c. Weighted-average cost method.
d. Specific identification method.
e. Gross profit method. - ANSWER-A
QN=5 Which of the following inventory costing methods will always result in the same
values for ending inventory and cost of goods sold regardless of whether a perpetual or
periodic inventory system is used?
a. FIFO and LIFO
b. LIFO and weighted-average cost
,c. Specific identification and FIFO
d. FIFO and weighted-average cost
e. LIFO and specific identification - ANSWER-C
QN=6 An overstatement of ending inventory will cause
a. An overstatement of assets and equity on the balance sheet.
b. An understatement of assets and equity on the balance sheet.
c. An overstatement of assets and an understatement of equity on the balance sheet.
d. An understatement of assets and an overstatement of equity on the balance sheet.
e. No effect on the balance sheet. - ANSWER-A
QN= 7 Acceptable inventory methods include:
a. LIFO method.
b. FIFO method.
c. Specific identification method.
d. Weighted average method.
e. All of these. - ANSWER-E
QN=8 A company had the following purchases during the current year:
Jan: 10 units at $ 120
Feb: 20 units at $130
May: 15 units at $140
Sep: 12 units at $150
Nov: 10 units at $160
On December 31, there were 26 units remaining in ending inventory. These 26 units
consisted of 2 from January, 4 from February, 6 from May, 4 from September, and 10
from November. Using the specific identification method, what is the cost of the ending
inventory?
a. $3,500.
b. $3,800.
c. $3,960.
d. $3,280.
e. $3,640. - ANSWER-B
QN=9 A company had inventory on November 1 of 5 units at a cost of $20 each. On
November 2, they purchased 10 units at $22 each. On November 6 they purchased 6
units at $25 each. On November 8, 8 units were sold for $55 each. Using the LIFO
perpetual inventory method, what was the value of the inventory on November 8 after
the sale?
a. $304
b. $296
c. $288
d. $280
e. $276 - ANSWER-E
,QN=10 Acme-Jones Corporation uses a weighted-average perpetual inventory system.
August 2, 10 units were purchased at $12 per unit.
August 18, 15 units were purchased at $14 per unit.
August 29, 12 units were sold.
What was the amount of the cost of goods sold for this sale?
a. $148.00.
b. $150.50.
c. $158.40.
d. $210.00.
e. $330.00. - ANSWER-C
QN=11 A company has inventory of 10 units at a cost of $10 each on June 1. On June
3, it purchased 20 units at $12 each. 12 units are sold on June 5. Using the FIFO
perpetual inventory method, what is the cost of the 12 units that were sold?
a. $120.
b. $124.
c. $128.
d. $130.
e. $140. - ANSWER-B
QN=12 A company has inventory of 15 units at a cost of $2 each on August 1. On
August 5, it purchased 10 units at $3 per unit. On August 12 it purchased 20 units at $4
per unit. On August 15, it sold 30 units. Using the FIFO perpetual inventory method,
what is the value of the inventory at August 15 after the sale?
a. $140.
b. $80.
c. $60.
d. $30.
e. $70. - ANSWER-C
QN=13 A company had inventory of 10 units at a cost of $20 each on November 1. On
November 2, it purchased 10 units at $21 each. On November 6 it purchased 15 units at
$25 each. On November 8, it sold 20 units for $54 each. Using the LIFO perpetual
inventory method, what was the cost of the 20 units sold?
a. $395.
b. $480.
c. $375.
d. $510.
e. $520. - ANSWER-B
QN=14 Acme-Jones Company uses a weighted-average perpetual inventory system.
August 2, 8 units were purchased at $12 per unit.
August 18, 15 units were purchased at $14 per unit.
August 29, 20 units were sold.
August 31, 10 units were purchased at $16 per unit.
, What is the per-unit value of ending inventory on August 31?
a. $12.00.
b. $13.30.
c. $15.38.
d. $16.00.
e. $17.74. - ANSWER-C
QN=15 Given the following information, determine the cost of the inventory at June 30
using the LIFO perpetual inventory method.
June, 1: Beginning inventory 15 units at $20 each
June, 15: Sale of 6 units at $50
June, 29: Purchased of 8 units at $25
The cost of goods sold is :
a. $200.
b. $220.
c. $120.
d. $275.
e. $300. - ANSWER-C
QN=16 A company has inventory of 10 units at a cost of $10 each on June 1. On June
3, it purchased 20 units at $12 each. 12 units are sold on June 5. Using the FIFO
periodic inventory method, what is the cost of ending inventories?
a. $120.
b. $216.
c. $128.
d. $130.
e. $140. - ANSWER-B
QN=17 A company has inventory of 20 units at a cost of $12 each on August 1. On
August 5, it purchased 10 units at $13 per unit. On August 12 it purchased 15 units at
$14 per unit. On August 15, it sold 30 units. Using the FIFO periodic inventory method,
what is the value of Cost of goods sold on August 15?
a. $140.
b. $160.
c. $370.
d. $210.
e. $590. - ANSWER-C
QN=18 A company had inventory of 15 units at a cost of $20 each on November 1. On
November 2, it purchased 10 units at $22 each. On November 6 it purchased 12 units at
$25 each. On November 8, it sold 22 units for $54 each. Using the FIFO perpetual
inventory method, what was the cost of the 22 units sold?
a. $454.
b. $366.
c. $450.
Solutions
QN=1 Merchandise inventory includes:
a. All goods owned by a company and held for sale.
b. All goods in transit.
c. All goods on consignment.
d. Only damaged goods.
e. All goods in the stores of company. - ANSWER-A
QN=2 Costs included in the Merchandise Inventory account can include:
a. Invoice price minus any discount.
b. Transportation-in.
c. Storage.
d. Insurance.
e. All of these. - ANSWER-E
QN=3 During a period of steadily rising costs, the inventory valuation method that yields
the lowest reported net income is:
a. Specific identification method.
b. Average cost method.
c. Weighted-average method.
d. FIFO method.
e. LIFO method. - ANSWER-E
QN=4 The inventory valuation method that results in the lowest taxable income in a
period of inflation is:
a. LIFO method.
b. FIFO method.
c. Weighted-average cost method.
d. Specific identification method.
e. Gross profit method. - ANSWER-A
QN=5 Which of the following inventory costing methods will always result in the same
values for ending inventory and cost of goods sold regardless of whether a perpetual or
periodic inventory system is used?
a. FIFO and LIFO
b. LIFO and weighted-average cost
,c. Specific identification and FIFO
d. FIFO and weighted-average cost
e. LIFO and specific identification - ANSWER-C
QN=6 An overstatement of ending inventory will cause
a. An overstatement of assets and equity on the balance sheet.
b. An understatement of assets and equity on the balance sheet.
c. An overstatement of assets and an understatement of equity on the balance sheet.
d. An understatement of assets and an overstatement of equity on the balance sheet.
e. No effect on the balance sheet. - ANSWER-A
QN= 7 Acceptable inventory methods include:
a. LIFO method.
b. FIFO method.
c. Specific identification method.
d. Weighted average method.
e. All of these. - ANSWER-E
QN=8 A company had the following purchases during the current year:
Jan: 10 units at $ 120
Feb: 20 units at $130
May: 15 units at $140
Sep: 12 units at $150
Nov: 10 units at $160
On December 31, there were 26 units remaining in ending inventory. These 26 units
consisted of 2 from January, 4 from February, 6 from May, 4 from September, and 10
from November. Using the specific identification method, what is the cost of the ending
inventory?
a. $3,500.
b. $3,800.
c. $3,960.
d. $3,280.
e. $3,640. - ANSWER-B
QN=9 A company had inventory on November 1 of 5 units at a cost of $20 each. On
November 2, they purchased 10 units at $22 each. On November 6 they purchased 6
units at $25 each. On November 8, 8 units were sold for $55 each. Using the LIFO
perpetual inventory method, what was the value of the inventory on November 8 after
the sale?
a. $304
b. $296
c. $288
d. $280
e. $276 - ANSWER-E
,QN=10 Acme-Jones Corporation uses a weighted-average perpetual inventory system.
August 2, 10 units were purchased at $12 per unit.
August 18, 15 units were purchased at $14 per unit.
August 29, 12 units were sold.
What was the amount of the cost of goods sold for this sale?
a. $148.00.
b. $150.50.
c. $158.40.
d. $210.00.
e. $330.00. - ANSWER-C
QN=11 A company has inventory of 10 units at a cost of $10 each on June 1. On June
3, it purchased 20 units at $12 each. 12 units are sold on June 5. Using the FIFO
perpetual inventory method, what is the cost of the 12 units that were sold?
a. $120.
b. $124.
c. $128.
d. $130.
e. $140. - ANSWER-B
QN=12 A company has inventory of 15 units at a cost of $2 each on August 1. On
August 5, it purchased 10 units at $3 per unit. On August 12 it purchased 20 units at $4
per unit. On August 15, it sold 30 units. Using the FIFO perpetual inventory method,
what is the value of the inventory at August 15 after the sale?
a. $140.
b. $80.
c. $60.
d. $30.
e. $70. - ANSWER-C
QN=13 A company had inventory of 10 units at a cost of $20 each on November 1. On
November 2, it purchased 10 units at $21 each. On November 6 it purchased 15 units at
$25 each. On November 8, it sold 20 units for $54 each. Using the LIFO perpetual
inventory method, what was the cost of the 20 units sold?
a. $395.
b. $480.
c. $375.
d. $510.
e. $520. - ANSWER-B
QN=14 Acme-Jones Company uses a weighted-average perpetual inventory system.
August 2, 8 units were purchased at $12 per unit.
August 18, 15 units were purchased at $14 per unit.
August 29, 20 units were sold.
August 31, 10 units were purchased at $16 per unit.
, What is the per-unit value of ending inventory on August 31?
a. $12.00.
b. $13.30.
c. $15.38.
d. $16.00.
e. $17.74. - ANSWER-C
QN=15 Given the following information, determine the cost of the inventory at June 30
using the LIFO perpetual inventory method.
June, 1: Beginning inventory 15 units at $20 each
June, 15: Sale of 6 units at $50
June, 29: Purchased of 8 units at $25
The cost of goods sold is :
a. $200.
b. $220.
c. $120.
d. $275.
e. $300. - ANSWER-C
QN=16 A company has inventory of 10 units at a cost of $10 each on June 1. On June
3, it purchased 20 units at $12 each. 12 units are sold on June 5. Using the FIFO
periodic inventory method, what is the cost of ending inventories?
a. $120.
b. $216.
c. $128.
d. $130.
e. $140. - ANSWER-B
QN=17 A company has inventory of 20 units at a cost of $12 each on August 1. On
August 5, it purchased 10 units at $13 per unit. On August 12 it purchased 15 units at
$14 per unit. On August 15, it sold 30 units. Using the FIFO periodic inventory method,
what is the value of Cost of goods sold on August 15?
a. $140.
b. $160.
c. $370.
d. $210.
e. $590. - ANSWER-C
QN=18 A company had inventory of 15 units at a cost of $20 each on November 1. On
November 2, it purchased 10 units at $22 each. On November 6 it purchased 12 units at
$25 each. On November 8, it sold 22 units for $54 each. Using the FIFO perpetual
inventory method, what was the cost of the 22 units sold?
a. $454.
b. $366.
c. $450.
