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Question : 5.1   Questions 1) Merchandise inventory represents the goods that a merchandiser

5.1   Questions

1) Merchandise inventory represents the goods that a merchandiser has available to sell to its customers.

2) Inventory is probably the retailer's smallest (by value) current asset.

3) Manufacturers have three different kinds of inventory.

4) GAAP allows two different kinds of inventory costing methods.

5) Under the specific-identification method, the flow of costs through the accounting records will:

A) be nearly the opposite of the physical flow of goods through the business.

B) closely match the physical flow of goods through the business.

C) exactly match the physical flow of goods through the business.

D) have no relationship to the physical flow of goods through the business.

6) Under the LIFO method, the flow of costs through the accounting records will:

A) be nearly the opposite of the physical flow of goods through the business.

B) closely match the physical flow of goods through the business.

C) exactly match the physical flow of goods through the business.

D) have no relationship to the physical flow of goods through the business.

7) Under the average cost method, the flow of costs through the accounting records will:

A) be nearly the opposite of the physical flow of goods through the business.

B) closely match the physical flow of goods through the business.

C) exactly match the physical flow of goods through the business.

D) have no relationship to the physical flow of goods through the business.

8) Under the FIFO method, the flow of costs through the accounting records will:

A) be nearly the opposite of the physical flow of goods through the business.

B) closely match the physical flow of goods through the business.

C) exactly match the physical flow of goods through the business.

D) have no relationship to the physical flow of goods through the business.

9) Under the specific-identification method, the physical flow of goods through the business will:

A) have no relationship to the flow of costs through the accounting records.

B) closely match the flow of costs through the accounting records.

C) exactly match the flow of costs through the accounting records.

D) be nearly the opposite of the flow of costs through the accounting records.

10) Under the LIFO method, the physical flow of goods through the business will:

A) have no relationship to the flow of costs through the accounting records.

B) closely match the flow of costs through the accounting records.

C) exactly match the flow of costs through the accounting records.

D) be nearly the opposite of the flow of costs through the accounting records.

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