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Pre-Assessment Questions and Correct
Answers the Latest Update and
Recommended Version
1. Which inventory method results in the lowest cost of goods sold and highest net income in a
period of rising prices?
A. Weighted average
B. Average cost
C. Last in, first out
D. First in, first out
✓ D. First in, first out
2. A seller of recreational vehicles (RVs) wants to keep track of the actual cost of each item
sold.
Which inventory costing method should this business use to meet this goal?
A. Last in, first out
B. Specific identification
C. Average cost
D. First in, first out
✓ B. Specific identification
3. A company sells baseball bats. The following record shows the inventory activity for the
month of October:
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Number of Bats Unit Cost
Oct 1 (beginning inventory) 50 $105
Purchases:
Oct 12 100 $108
Oct20 100 $110
Oct 25 200 $112
October Sales 350
Using the average cost method, what is the ending inventory balance?
A. $ 10,650
B. $10,875
C. $10,989
D. $11,200
✓ # Units = 450
✓ Total Cost for Units available = $49,450
✓ Average cost per Unit = $49,450/450 = $109.89
✓ Ending Inventory = 350
✓ Cost of ending inventory = 350 x $109.89 = $38,462
✓ $49,450-38,462= $10,989
✓
✓
✓ C. $10,989
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4. A company sells baseball bats. The following record shows the inventory activity for the
month of October:
Number of Bats Unit Cost
Oct 1 (beginning inventory) 50 $105
Purchases:
Oct 12 100 $108
Oct 20 100 $110
Oct 25 200 $112
October Sales 350
Using the first in, first out method, what is the value of inventory on October 31 (rounded to
the nearest dollar)?
A. $10,650
B. $10,875
C. $10,989
D. $11,200
✓ Total COU Oct25=$22,400
✓ Ending Inventory = 100 * $112= $11,200
✓
✓
✓ D. $11,200
5. What is the normal method of amortizing a patent?
|
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A. Sum of the year's digits
B. Units of activity
C. Double declining balance
D. Straight line
✓ D. Straight line
6. In July 2013, a company purchased a mine at a cost of $18,000,000. The mine has an
estimated life of ten years with no estimated salvage value. The mine is estimated to contain
500,000 tons of ore. During 2013, 120,000 tons of ore were extracted and sold.
What is the depletion expense in year 2013?
A. $900,000
B. $1,800,000
C. $2,160,000
D. $4,320,000
✓ Cost per Ton = 18,000,000/500,000 = 36
✓ 36 x 120,000 = 4,320,000
✓
✓ D. $4,320,000
✓
✓ http://accountingexplained.com/financial/non-current-assets/depletion-expense
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✓ © 2024 TestTrackers ✓ Your Success is Our Mission!
✓ Customer Support: [+254707240657]
Pre-Assessment Questions and Correct
Answers the Latest Update and
Recommended Version
1. Which inventory method results in the lowest cost of goods sold and highest net income in a
period of rising prices?
A. Weighted average
B. Average cost
C. Last in, first out
D. First in, first out
✓ D. First in, first out
2. A seller of recreational vehicles (RVs) wants to keep track of the actual cost of each item
sold.
Which inventory costing method should this business use to meet this goal?
A. Last in, first out
B. Specific identification
C. Average cost
D. First in, first out
✓ B. Specific identification
3. A company sells baseball bats. The following record shows the inventory activity for the
month of October:
|
✓ Thank You for Choosing Us! ✓ Resources & Updates: [Testtrackers - Stuvia US]
✓ © 2024 TestTrackers ✓ Your Success is Our Mission!
✓ Customer Support: [+254707240657]
, TestTrackers: Unlock Your Exam Potential! | Quality Practice Materials | Boost Your Confidence Today!
Number of Bats Unit Cost
Oct 1 (beginning inventory) 50 $105
Purchases:
Oct 12 100 $108
Oct20 100 $110
Oct 25 200 $112
October Sales 350
Using the average cost method, what is the ending inventory balance?
A. $ 10,650
B. $10,875
C. $10,989
D. $11,200
✓ # Units = 450
✓ Total Cost for Units available = $49,450
✓ Average cost per Unit = $49,450/450 = $109.89
✓ Ending Inventory = 350
✓ Cost of ending inventory = 350 x $109.89 = $38,462
✓ $49,450-38,462= $10,989
✓
✓
✓ C. $10,989
|
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✓ Customer Support: [+254707240657]
, TestTrackers: Unlock Your Exam Potential! | Quality Practice Materials | Boost Your Confidence Today!
4. A company sells baseball bats. The following record shows the inventory activity for the
month of October:
Number of Bats Unit Cost
Oct 1 (beginning inventory) 50 $105
Purchases:
Oct 12 100 $108
Oct 20 100 $110
Oct 25 200 $112
October Sales 350
Using the first in, first out method, what is the value of inventory on October 31 (rounded to
the nearest dollar)?
A. $10,650
B. $10,875
C. $10,989
D. $11,200
✓ Total COU Oct25=$22,400
✓ Ending Inventory = 100 * $112= $11,200
✓
✓
✓ D. $11,200
5. What is the normal method of amortizing a patent?
|
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✓ Customer Support: [+254707240657]
, TestTrackers: Unlock Your Exam Potential! | Quality Practice Materials | Boost Your Confidence Today!
A. Sum of the year's digits
B. Units of activity
C. Double declining balance
D. Straight line
✓ D. Straight line
6. In July 2013, a company purchased a mine at a cost of $18,000,000. The mine has an
estimated life of ten years with no estimated salvage value. The mine is estimated to contain
500,000 tons of ore. During 2013, 120,000 tons of ore were extracted and sold.
What is the depletion expense in year 2013?
A. $900,000
B. $1,800,000
C. $2,160,000
D. $4,320,000
✓ Cost per Ton = 18,000,000/500,000 = 36
✓ 36 x 120,000 = 4,320,000
✓
✓ D. $4,320,000
✓
✓ http://accountingexplained.com/financial/non-current-assets/depletion-expense
|
✓ Thank You for Choosing Us! ✓ Resources & Updates: [Testtrackers - Stuvia US]
✓ © 2024 TestTrackers ✓ Your Success is Our Mission!
✓ Customer Support: [+254707240657]
