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Five ACC Multiple Choice Questions




1. According to IFRS, how should inventory be valued on the balance sheet?;A) Historical cost;B) Market value;C) At the price paid to get the inventory ready for sale;D) Lower of cost and net realizable value;2. In a period when inventory costs from the supplier are increasing, which of the following inventory flow assumptions will result in the highest net income?;A) FIFO;B) Cannot tell from the information provided;C) Net realizable value;D) Average cost;3. In a periodic inventory system, what type of entry is required to record the cost of sales?;A) An adjusting entry;B) A transactional entry;C) None of the other answers is correct - the cost of sales is not recorded in a periodic system;D) A closing entry;4. Which inventory system keeps a running total of purchases and sales of inventory with adjustments that reflect changes as they occur?;A) A just-in-time system;B) A perpetual system;C) A specific identification system;D) A periodic system;5. The use of the FIFO inventory flow assumptions means that;A) there is the best matching of costs to the physical flow of goods.;B) the periodic inventory system must be used.;C) the ending inventory includes the oldest costs.;D) the oldest units are included in cost of sales.


Paper#81929 | Written in 18-Jul-2015

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