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1)

The value of inventories or stock is figured out at the lower of cost and

A)  purchase price WRONG ANSWER

B)  opportunity cost WRONG ANSWER

C)  realizable value WRONG ANSWER

D)  net realizable valueRIGHT ANSWER!!!


2)

An overstatement in the value of closing stock overstates all of the following except

A)  Net income WRONG ANSWER

B)  Current assets WRONG ANSWER

C)  Capital of the business WRONG ANSWER

D)  Cost of goods soldRIGHT ANSWER!!!


3)

Which of the following are generally the inventories of a service business

A)  Finished goods inventories WRONG ANSWER

B)  Purchased goods WRONG ANSWER

C)  Raw material inventories WRONG ANSWER

D)  Work in process inventories RIGHT ANSWER!!!


4)

All of the following are the methods of inventory costing except

A)  FIFO WRONG ANSWER

B)  LIFO WRONG ANSWER

C)  AVCO or average costWRONG ANSWER

D)  Stock takeRIGHT ANSWER!!!


5)

Which one of the following methods of inventory costing yields highest taxable income?

A)  FIFO RIGHT ANSWER!!!

B)  LIFO WRONG ANSWER

C)  AVCO or average costWRONG ANSWER

D)  Standard cost methodWRONG ANSWER


6)

Which one of the following methods of inventory costing produces ending stock cost close to the market value of the inventories?

A)  FIFORIGHT ANSWER!!!

B)  LIFO WRONG ANSWER

C)  AVCO or average method WRONG ANSWER


7)

Which of the following inventory costing systems is regarded as the most complex one?

A)  Periodic inventory system WRONG ANSWER

B)  Perpetual inventory system RIGHT ANSWER!!!


8)

Which one of the following double entries is passed when goods are purchased on credit under perpetual inventory system?

A)  Purchases Debit and creditor Credit WRONG ANSWER

B)  Purchases Debit and a/c payable Credit WRONG ANSWER

C)  Purchases Debit and Cash Credit WRONG ANSWER

D)  Inventory Debit and a/c payable Credit RIGHT ANSWER!!!


9)

Which of the following journal entries is passed when goods are purchased on credit under the periodic inventory system?

A)  Purchases Debit and cash Credit WRONG ANSWER

B)  Cash Debit and Purchases Credit WRONG ANSWER

C)  Purchases Debit and a/c payable Credit RIGHT ANSWER!!!

D)  Inventory Debit and a/c payable Credit WRONG ANSWER


10)

Which one of the following inventory systems ascertains the balance of stock or amount of stock at the end of an accounting period or at the time of physical inventory count?

A)  Periodic inventory system RIGHT ANSWER!!!

B)  Perpetual inventory system WRONG ANSWER






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