1.Restricted cash is reported: separately as an asset on the balance sheet toget

Question

1.Restricted cash is reported:

separately as an asset on the balance sheet

together with cash and cash equivalents on the balance sheet

separately under stockholders' equity on the balance sheet

together with cash and cash equivalents on the income statement

2.Companies using a perpetual inventory system:

never physically count their inventory.

must count their inventory at least once a week.

still need to count the inventory at the end of the period.

always know the actual amount in inventory from their accounting records.

3.AAA Co. uses a periodic inventory system and has the following information in regard to its inventory:

Beginning inventory

200 units @ 15

$ 3,000

Purchase on January 25

300 units @ 16

4,800

Purchase on March 15

200 units @ 17

3,400

Purchase on October 2

400 units @ 18

   7,200

Goods available for sale

$18,400

There are 500 units in ending inventory. What is the amount of the ending inventory using the LIFO method?

$3,000

$7,200

$7,800

$8,900

separately as an asset on the balance sheet

together with cash and cash equivalents on the balance sheet

separately under stockholders' equity on the balance sheet

together with cash and cash equivalents on the income statement

Explanation / Answer

Question - 1

Restricted cash is reported separately as an asset on the balance sheet

Question - 2

Companies using a perpetual inventory system always know the actual amount in inventory from their accounting records

Question - 3

The Answer is $ 7800

Amount of the ending inventory using the LIFO method

The Value of Ending Inventory = (200 units x 15) + (300 units x 16) = $ 7,800

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