1. A company purchased 10 units for $5 on January 3. It purchased 10 units for $7 each on February 28. It sold 10 units on March 1. If the company uses the first-in, first-out (FIFO) inventory costing method, what is the dollar amount for ending inventory on the December 31 balance sheet assuming that the company uses a perpetual inventory system?
Flag this QuestionQuestion 2. Our company sold merchandise on account with a cost of $700 for $1,000. Our company uses a perpetual inventory system. What account and amount would we credit to record the cost of the merchandise sold?
| accounts receivable, $1,000 |
| merchandise inventory, $700 |
Flag this QuestionQuestion 3 In a perpetual inventory system:
| we maintain a running record of inventory and cost of goods sold. |
| the company is not required to complete a periodic inventory |
| inventory and cost of goods sold are updated only when a physical count of inventory is taken |
| we can only use either the FIFO or LIFO methods |
Flag this QuestionQuestion 4 In a period of rising costs, which inventory method results in the lowest dollar value for ending inventory?
Flag this QuestionQuestion 5 In a period of rising costs, which inventory method results in highest cost of goods sold and lowest gross profit?
Flag this QuestionQuestion 6 Our company sold merchandise on account with a cost of $700 for $1,000. Our company uses a perpetual inventory system. What account and amount would we debit to record the cost of the merchandise sold?
| accounts receivable, $1,000 |
| merchandise inventory, $700 |
Flag this QuestionQuestion 7Our company sold merchandise on account with a cost of $700 for $1,000. Our company uses a perpetual inventory system. What account and amount would we credit to record the sales revenue?
| accounts receivable, $1,000 |
| merchandise inventory, $700 |
Flag this QuestionQuestion 8 When using the weighted-average inventory costing method in a perpetual inventory system, a new weighted-average cost per unit is calculated:
| only at the end of the accounting period |
| every time units of inventory are sold |
| each time new merchandise inventory is purchased |
| every time there is either a purchase or a sale of merchandise |
Flag this QuestionQuestion 9 The two main inventory accounting systems are:
| cash method and accrual method |
| weighted-average and specific identification |
Flag this QuestionQuestion 10 The loss of inventory that occurs because of theft, damage, and errors is referred to as:
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