1. Under a perpetual inventory system, the amount of each type of merchandise on hand is available in the
a. inventory ledger.
b. purchase ledger.
c. customer’s ledger.
d. creditor’s ledger.
2. Taking a physical count of inventory
a. has no internal control relevance.
b. is not necessary when a perpetual inventory system is used.
c. is not necessary when a periodic inventory system is used.
d. should be done near year-end.
3. Control of inventory should begin as soon as the inventory is received. Which of the following internal control steps is not done to meet this goal?
a. Check the invoice extensions and totals
b. Check the invoice to the purchase order
c. Check the invoice with the person who specifically purchased the item
d. Check the invoice to the receiving report
4. Which of the following is not an example for safeguarding inventory?
a. Matching receiving documents, purchase orders, and vendor’s invoice.
b. Returning inventory that is defective or broken.
c. Physical devices such as two-way mirrors, cameras, and alarms.
d. Storing inventory in restricted areas.
5. Which of the following methods is appropriate for a business whose inventory consists of a relatively small number of unique, high-cost items?
a. Specific Identification
6. Ending inventory is made up of the oldest purchases when a company uses
a. average cost.
b. retail method.
c. last-in, first-out.
d. first-in, first-out.
7. The two most widely used methods for determining the cost of inventory are
a. FIFO and LIFO.
b. LIFO and average.
c. gross profit and average.
d. FIFO and average.
8. Cost flow is in the order in which costs were incurred when using
a. last-in, first-out.
b. first-in, first-out.
c. average cost.
d. weighted average.
9. Which of the following companies would be more likely to use the specific identification inventory costing method?
b. Best Buy
c. Gordon’s Jewelers
10. The inventory data for an item for November are:
Nov. 01 Inventory 20 units at $20.00
Nov. 04 Sold 11 units
Nov. 10 Purchased 30 units at $19.00
Nov. 17 Sold 22 units
Nov. 30 Purchased 23 units at $24.00
Using the perpetual LIFO system, what is the cost of the merchandise sold for November?