Inventory or stock valuation MCQS


11)

Which one of the following inventory costing methods is supposed to issue the most recently purchased goods?

A)  FIFO method WRONG ANSWER

B)  AVCO or average cost methodWRONG ANSWER

C)  LIFO method RIGHT ANSWER!!!

D)  Moving averageWRONG ANSWER


12)

Which of the following inventory systems is the most appropriate for a business that deals in a precious metal such as gold?

A)  Periodic inventory system WRONG ANSWER

B)  Perpetual inventory system RIGHT ANSWER!!!


13)

Opening inventory + Net purchases = What?

A)  Ending inventoryWRONG ANSWER

B)  Closing stock WRONG ANSWER

C)  Cost of goods manufactured WRONG ANSWER

D)  Cost of goods available for sale RIGHT ANSWER!!!


14)

Cost of goods available for sale – closing inventory = What?

A)  Opening inventoryWRONG ANSWER

B)  Cost of opening finished goods inventoryWRONG ANSWER

C)  Work in process ending inventory WRONG ANSWER

D)  Cost of goods soldRIGHT ANSWER!!!


15)

Gross profit is 25% on total sales and cost of goods sold amounts to $750. Which of the following is the amount of gross profit?

A)  $187.7WRONG ANSWER

B)  $200WRONG ANSWER

C)  $150WRONG ANSWER

D)  $250RIGHT ANSWER!!!


16)

At the end of XYZ firm’s accounting period, the closing stock was found to be $10,000. However, it was realized that a fixed asset of cost $1000 was included in the stock count. Which of the following is the correct amount of ending inventory or stock?

A)  $10,000WRONG ANSWER

B)  $11,000WRONG ANSWER

C)  $9000RIGHT ANSWER!!!

D)  $8000WRONG ANSWER


17)

NRV or net realizable value of inventory is the expected selling price or market value less

A)  Carry value of the inventory WRONG ANSWER

B)  expenses necessary to complete sale RIGHT ANSWER!!!

C)  Cost of the stock WRONG ANSWER

D)  replacement cost WRONG ANSWER


18)

Cost of an item in the closing inventory is $100 whereas the net realizable value is $85. At which one of following amounts the item should be shown in the financial statement?

A)  $100 WRONG ANSWER

B)  $115WRONG ANSWER

C)  $85RIGHT ANSWER!!!

D)  $185WRONG ANSWER


19)

An item of inventory was purchased for $100. It can be sold for $125 and company can replace the item with the new one at the cost of $105. Which of the following is the historical cost of that item?

A)  $125 WRONG ANSWER

B)  $105 WRONG ANSWER

C)  $100 RIGHT ANSWER!!!


20)

Under which method of inventory costing a pre-determined cost is assigned to all items of inventory?

A)  Replacement cost method WRONG ANSWER

B)  Standard cost method RIGHT ANSWER!!!

C)  AVCO method WRONG ANSWER

D)  FIFO method WRONG ANSWER