ACCI01 Exam Final STUDY GUIDE 1. The merchandise invemory account always reflect

Question

ACCI01 Exam Final STUDY GUIDE 1. The merchandise invemory account always reflects the ourrent inverbury on 2. Merchandise Inventory has a normal debit belance 7. Gross saks less sales retums and allowances is callet et salesr S. Net sales phus cost of merchandise sold is called gros profit. 9. Gross margn and gross profit mean thesame thing 11. The "FIFO" and LIFO invetory oosting methods are based on assut ooeting methods are based on assumed cost flows that are nor required to reflect the actual phosical mowement of merchandise within the com debited for the cost of all merchandise bought. sales volume is relatively low and inventory unit value is relatively high. perpetual system of accounting for invenory, the merchandise inventory sccoumt is specific idemirisation method of imvenory is generally practical cnly for businesses in which 15. A method of assigsing merchandise cost that requires that cach item sold sed each inem remaining in inventory be separately idestified with respect to its purchase cont is called last-in, fiest-ou 16. A widely used method of allocsting merchandise cost that aswurnes the first merehandise bought is the first merchandise sold is called the test-in, -out method 17. A method of allocating merchandise cost that is based on the avera ge cost of identical vnits is known as weighted average cost or average cot 18. Perpetusal invemories eliminate the need foe taking periodic phosical invemories 19. The natural business year is a fiscal year that starts and ends at the time the stock of merchandise is normally its lowest level 21. A method of allocating merchandise most recently purchased merchandise and the carliest merchandise bought remain in in first in, first-out method. costs that assumes the sales in the period were made from the ventory is called 22. When a continuous record is kept of thke quantities and costs of merchandise on hand, the system is knowm as perpetual. 23. In the perpetua I system, no year-end isdjusting entry is necessary, as long as the physical inventory agrees with the amount reported in the merchandise inventory acoowst. 25. If a difference is found berween the physical count and the amount in the perpetual invenmory records, the records must be corrected by an aperopriate adjusting entry

Explanation / Answer

As per policy, 10 MCQs are allowed to be answered in one question, so here answering 12 parts,

1. True, the merchandise inventory account always shows the current balance of inventory.

2. True

7. True, gross sales – sales returns and allowances = net sales

8. False, net sales – cost of merchandise sold = gross profit

9. True, gross margin = gross profit

11. True, it is only on the paper or on the account because it is assumed that all units of the inventory are same and of same characteristics.

12. True, because what comes in is debited.

13. True, as from which purchase what quantity is sold out.

15. False, the specific item is not required to be recognized, but only purchase cost is considered.

16. True

17 . True

18. False, periodic physical inventories is essential to have quantity of product at a particular time.

===============================

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.