ACC 101 Exam questions and
answers graded 100%
Tracking inventory costs (equation) - ANS✅✅Beginning inventory
+ Purchases
=Goods available for sale (GAFS)
-ending inventory
=Cost of goods sold
FIFO - ANS✅✅First in and first out
assumes first (oldest) units
LIFO - ANS✅✅Last (newest) units purchased are sold first
Average cost - ANS✅✅It is determined by multiplying the inventory times the cost and finding the
Goods Available for Sale. And then dividing the GAFS by the total cost of inventory. This should have
an average unit per cost and then multiply this by the requested units.
Comparability - ANS✅✅Different companies use the same or similar accounting method (ex. FIFO
or LIFO or avg cost)
Consistency - ANS✅✅Company uses same method each year
What method has the highest inventory? - ANS✅✅FIFO
What method has the highest Cost of Goods Sold (lowest net income) - ANS✅✅LIFO
Who decides which of the four methods a company should use - ANS✅✅CEO?
Cash Realizable Value (or Net Realizable value) - ANS✅✅Amount of A/R company actually expects
to collect
answers graded 100%
Tracking inventory costs (equation) - ANS✅✅Beginning inventory
+ Purchases
=Goods available for sale (GAFS)
-ending inventory
=Cost of goods sold
FIFO - ANS✅✅First in and first out
assumes first (oldest) units
LIFO - ANS✅✅Last (newest) units purchased are sold first
Average cost - ANS✅✅It is determined by multiplying the inventory times the cost and finding the
Goods Available for Sale. And then dividing the GAFS by the total cost of inventory. This should have
an average unit per cost and then multiply this by the requested units.
Comparability - ANS✅✅Different companies use the same or similar accounting method (ex. FIFO
or LIFO or avg cost)
Consistency - ANS✅✅Company uses same method each year
What method has the highest inventory? - ANS✅✅FIFO
What method has the highest Cost of Goods Sold (lowest net income) - ANS✅✅LIFO
Who decides which of the four methods a company should use - ANS✅✅CEO?
Cash Realizable Value (or Net Realizable value) - ANS✅✅Amount of A/R company actually expects
to collect
