11) The principle of consistency states that:
A) changes in accounting methods should occur from one fiscal period to the next.
B) a company cannot change from one inventory valuation method to another.
C) a company should switch from LIFO to FIFO every other period.
D) by using the same method, the financial statements are more meaningful.
12) The full disclosure principle says that if a change is made:
A) the company should disclose the change.
B) the effects of the change on profit and inventory valuation should be disclosed.
C) the company should show justification for the change in a footnote on the financial reports.
D) All of these answers are correct.
13) If goods are shipped FOB destination point by the seller, when does title pass?
A) When the goods arrive at the buyer’s location
B) When they leave the seller’s location
C) When they are signed for
D) None of the above
14) Which of the following items should be included in inventory?
A) Supplies on hand
B) Goods that have been consigned to another company
C) Goods in transit shipped to another company FOB destination
D) All of the above
15) Barry’s Books uses a periodic inventory system. Barry’s Books sold 45 copies of Helpful Hints during September. Other data for September include:
Sep. 1
Balance
12 books @ $20
8
Purchased
10 books @ $21
17
Purchased
30 books @ $22
25
Purchased
15 books @ $24
Ending inventory under the FIFO method is:
A) $450.
B) $514.
C) $528.
D) $440.
16) Barry’s Books uses a periodic inventory system. Barry’s Books sold 45 copies of Helpful Hints during September. Other data for September include:
Sep. 1
Balance
12 books @ $20
8
Purchased
10 books @ $21
17
Purchased
30 books @ $22
25
Purchased
15 books @ $24
Cost of goods sold under the FIFO method is:
A) $956.
B) $514.
C) $1,020.
D) some other number
17) Hawkeye Tack uses a periodic inventory system. Hawkeye Tack sold 80 sweaters during September. Other data for September includes:
Sep. 1
Balance
40 @ $25
8
Purchased
12 @ 28
17
Purchased
25 @ 30
25
Purchased
35 @ 32
Cost of goods sold under the FIFO method is:
A) $800.
B) $2,406.
C) $1,024.
D) $2,182.
18) Lois’s Furniture uses a periodic inventory system. Lois sold 60 tables during August. Other data for August includes:
Aug. 1
Balance
8 @ $15
9
Purchased
12 @ 18
18
Purchased
60 @ 20
Ending inventory under the LIFO method is:
A) $1,200.
B) $336.
C) $1,130.
D) $400.
19) Shayla’s Design uses a periodic inventory system. Shayla sold 33 artist kits during January. Other data for January includes:
Jan. 1
Balance
12 kits @ $30
11
Purchased
20 kits @ $33
25
Purchased
26 kits @ $35
Ending inventory under the LIFO method is:
A) $1,141.
B) $1,055.
C) $875.
D) $789.
20) Shayla’s Design uses a periodic inventory system. Shayla sold 33 artist kits during January. Other data for January includes:
Jan. 1
Balance
12 kits @ $30
11
Purchased
20 kits @ $33
25
Purchased
26 kits @ $35
Ending inventory under the FIFO method is:
A) $1,141.
B) $1,055.
C) $875.
D) $789.
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