Question :
91. Which of the following would not be a component of : 1228527
91. Which of the following would not be a component of the year-end inventory balance?
A. Freight-in costs
B. Inventory inspection costs
C. Inventory preparation costs
D. Inventory related selling costs
92. Which of the following statements is correct?
A. Cost of goods available for sale is allocated between costs of goods sold and inventory at year-end.
B. A purchase of inventory on credit increases both cost of goods available for sale and cost of goods sold.
C. Purchases of inventory during a period less that period’s cost of goods sold equals ending inventory regardless of the beginning inventory amount.
D. Cost of goods available for sale equals ending inventory plus purchases.
93. Which of the following businesses would not be as likely to use the specific identification method of inventory valuation?
A. An automobile dealer
B. A custom jewelry store
C. A hardware store
D. An art dealer
94. Which of the following statements is incorrect?
A. A year-end purchase of inventory increases the LIFO cost of goods sold when prices are increasing and a periodic inventory system is used.
B. A year-end purchase of inventory increases the FIFO ending inventory when prices are increasing and a periodic inventory system is used.
C. The choice of an inventory costing method is dependent on the actual flow of goods when inventory is sold.
D. A year-end purchase of inventory doesn’t affect the weighted-average ending inventory when prices are increasing and a periodic inventory system is used.
95. Which of the following statements is incorrect when inventory prices are increasing?
A. LIFO’s cost of goods sold will be the largest among the inventory costing methods.
B. LIFO’s income tax will be the lowest among the inventory costing methods.
C. Ending inventory using the average cost method will be larger than the ending inventory when the LIFO method is used.
D. Cost of goods sold using the average cost method will be less than cost of goods sold when the FIFO method is used.
96. Which of the following statements is correct when inventory prices are decreasing?
A. FIFO’s cost of goods sold will be the largest among the inventory costing methods.
B. LIFO’s income tax will be the lowest among the inventory costing methods.
C. Ending inventory using the average cost method will be less than the ending inventory when the LIFO method is used.
D. Cost of goods sold using the average cost method will be greater than cost of goods sold when the LIFO method is used.
97. Which of the following statements is correct when inventory prices are increasing?
A. LIFO’s ending inventory will be the largest among the inventory costing methods.
B. FIFO’s gross profit will be the lowest among the inventory costing methods.
C. Inventory turnover will be the largest when the LIFO inventory method is used.
D. Use of the LIFO method will result in lower cash flows due to an increased cost of goods sold.
98. Which of the following statements is correct when inventory prices are decreasing?
A. Inventory turnover will be the greatest when the average cost inventory method is used.
B. FIFO’s gross profit will be the highest among the inventory costing methods.
C. Inventory turnover will be the largest when the LIFO inventory method is used.
D. Use of the LIFO method will result in lower cash flows due to a decreased cost of goods sold.
99. Which of the following statements is correct with respect to the determination of operating cash flows?
A. A decrease in inventory is deducted from net income.
B. An increase in accounts payable is deducted from net income.
C. An increase in inventory is deducted from net income.
D. A decrease in accounts payable is added to net income.
100. What is the net adjustment to net income with respect to the determination of operating cash flows when inventory increases $100,000 and accounts payable increases $20,000?
A. An increase of $120,000.
B. A decrease of $120,000.
C. An increase of $80,000.
D. A decrease of $80,000
