Accounting 201A Michael Manning
QUESTIONS & ANSWERS(RATED A+)
When purchases of merchandise are recorded in the Purchases account rather than
the Inventory account the inventory system being used - ANSWERPeriodic system
To determine costs of goods sold under a periodic inventory system, all the following
are necessary except- - ANSWERTotal cash register receipts for the period.
In some lines of business, it is customary to hold the goods of other parties and try to
sell the goods for them for a fee. These goods are called: - ANSWERconsigned
goods
When title of good remains with the seller until the good reaches the buyer the terms
are said to be - ANSWERFOB Destination
The three assumed cost flow methods are: - ANSWERFIFO, LIFO, Average Cost
Which of the following statements are not true regarding LIFO - ANSWEREnding
inventory is based on the price of the most recent units purchased
In a period of increasing prices, the inventory system that will always yield the
highest net income is - ANSWERLIFO
Under lower-of-cost-or-net realizable value (LCNRV), net realizable value is defined
as: - ANSWERNet amount expected to be received from the sales of inventory
In order to be classified as merchandise inventory, merchandise must be -
ANSWERboth owned by the company and in a form ready for sale to customers in
the ordinary course of business
General Motors would classify automobiles on the assembly line in various stages of
completion as - ANSWERwork in process
Goods held on consignment are - ANSWERnever owned by the consignee
Many companies use just-in-time inventory methods. Which of the following is not an
advantage of this method - ANSWERCompanies may not have quantities to meet
customer demand.
Internal control over cash disbursements is more effective when payments are made
by - ANSWERCheck
The bank would debit the customer's account for all of the following items except -
ANSWERCollection of a note receivable
Examples of cash equivalents include - ANSWERtreasury bills, commercial paper,
money market funds
QUESTIONS & ANSWERS(RATED A+)
When purchases of merchandise are recorded in the Purchases account rather than
the Inventory account the inventory system being used - ANSWERPeriodic system
To determine costs of goods sold under a periodic inventory system, all the following
are necessary except- - ANSWERTotal cash register receipts for the period.
In some lines of business, it is customary to hold the goods of other parties and try to
sell the goods for them for a fee. These goods are called: - ANSWERconsigned
goods
When title of good remains with the seller until the good reaches the buyer the terms
are said to be - ANSWERFOB Destination
The three assumed cost flow methods are: - ANSWERFIFO, LIFO, Average Cost
Which of the following statements are not true regarding LIFO - ANSWEREnding
inventory is based on the price of the most recent units purchased
In a period of increasing prices, the inventory system that will always yield the
highest net income is - ANSWERLIFO
Under lower-of-cost-or-net realizable value (LCNRV), net realizable value is defined
as: - ANSWERNet amount expected to be received from the sales of inventory
In order to be classified as merchandise inventory, merchandise must be -
ANSWERboth owned by the company and in a form ready for sale to customers in
the ordinary course of business
General Motors would classify automobiles on the assembly line in various stages of
completion as - ANSWERwork in process
Goods held on consignment are - ANSWERnever owned by the consignee
Many companies use just-in-time inventory methods. Which of the following is not an
advantage of this method - ANSWERCompanies may not have quantities to meet
customer demand.
Internal control over cash disbursements is more effective when payments are made
by - ANSWERCheck
The bank would debit the customer's account for all of the following items except -
ANSWERCollection of a note receivable
Examples of cash equivalents include - ANSWERtreasury bills, commercial paper,
money market funds
