Multiple choice questions on Inventory methods
1. In a perpetual inventory system, the cost of purchases is debited to:
a.Purchases.
b.Cost of goods sold.
c.Inventory.
d.Accounts payable.
2. In a periodic inventory system, the cost of purchases is debited to:
a.Purchases.
b.Cost of goods sold.
c.Inventory.
d.Accounts payable.
3.In a period when prices are rising and inventory quantities are stable, the inventory method that would result in the highest ending inventory is:
a.weighted average.
b.FIFO.
c.LIFO.
d.none of the above.
4. Ending inventory is equal to the cost of items on hand plus:
a.items in transit sold f.o.b. shipping point.
b.purchases in transit f.o.b. destination.
c.items in transit sold f.o.b. destination.
d.None of the above.
5. A physical inventory count is taken when using which of the following inventory methods?
a.Perpetual
b.Periodic
c.Interim
d.both perpetual and periodic methods.