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Goods on consignment belong to the

A	consignor.

B

customer.

C	consignee.

D

supplier.

The first-in, first-out (FIFO) cost formula assumes:

A	the newest goods purchased are the first ones sold.

B	the oldest goods purchased will remain in inventory longest.

C	the oldest goods purchased are the last ones sold.

D	the oldest goods purchased are the first ones sold.

When using first-in, first-out (FIFO):

A	management uses average costs to assign to the balance sheet and the income statement.

B	identical costs go to the balance sheet and the income statement.

C	older costs go to the income statement; newer costs go to the balance sheet.

D	older costs go to the balance sheet; newer costs go to the income statement.

A company purchases 20 units of Product X for $10 each and then 30 units for $12 each. The company then sells 25 units of Product X at a $20 selling price per unit. Assuming the company uses the FIFO cost formula, cost of goods sold is:

A

$260.

B

$300.

C

$200.

D $250. A company purchases 30 units of Product Q for $10 each and then 20 units for $15 each. The company then sells 20 units of Product Q at a $30 selling price per unit. Assuming the company uses the FIFO cost formula, ending inventory is: A $360. B $300. C $400. D $300. A company purchases 20 units of Product Y for $10 each and then 30 units for $12 each. Assuming the company uses the weighted average cost formula, the weighted average unit cost after the second purchase is A $11.00. B $12.00. C $11.20. D $10.00. Barnes Software purchases 10 units of microchips for $10, 50 units for $15 each, and 20 units for $20 each on March 1, 13, and 20, respectively. Assuming the company uses the weighted average cost formula under a perpetual system, if Barnes sells 25 microchips on March 18 what is the cost of goods sold on this sale? A $475.00 B $390.75 C $354.25 D $325.00 Which of the following inventory cost flow assumptions is not acceptable for Canadian GAAP? A Specific identification. B All of these answers are acceptable. C Weighted-average method. D FIFO. Assuming falling inventory prices, which inventory cost flow assumption results in reporting the higher net income? A FIFO. B Specific identification. C Weighted average. D None of these. If the ending inventory is overstated A assets will be understated and owners equity will be overstated. B assets will be overstated and owners equity will be understated. C assets will be overstated and owners equity will be overstated. D assets will be understated and owners equity will be understated. If the ending inventory for Year 1 was understated by $400, cost of goods sold in Year 2 will be A correct. B understated by $400. C understated by $800. D overstated by $400. Net realizable value is: A calculated for inventory in total. B the historical cost. C the selling price less any costs required to make the goods ready for sale. D the current replacement value. When the net realizable value of inventory is lower than its cost, the required journal entry will include a: A credit to cost of goods sold. B debit to cost of goods sold. C debit to merchandise inventory. D credit to cash.

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