REVISION 2 : TOPIC 7, 8 & 9

A characteristic of capital expenditures is that the expenditures occur frequently during the period of ownership of the fixed asset.

• TRUE

• FALSE

Additions and improvements to a fixed asset that increase the asset's operating efficiency, productive capacity, or expected useful life are recorded as operational expenses for the current period.

• TRUE

• FALSE

Recording depreciation each period is an application of the expense recognition concept/principle.

• TRUE

• FALSE

Once an asset is fully depreciated, no additional depreciation can be taken even though the asset is still being used by the business.

• TRUE

• FALSE

The book value of a fixed asset is the amount originally paid for the asset less the latest accumulated depreciation amount.

• TRUE

• FALSE

The easiest method to apply in inventory evaluation is

• last-in, first-out (LIFO)

• first-in, first-out (FIFO)

• weighted average

• standard cost

The inventory evaluation method which does not represent the actual ending inventory value is

• last-in, first-out (LIFO)

• first-in, first-out (FIFO)

• weighted average

• standard cost

Physical stock count will be made at the end of each accounting period to enable the determination of cost of goods sold. This statement is suitable for

• Periodic inventory system

• Perpetual inventory system

Which inventory system is suitable to be used for the businesses with the high volume of products and with the several outlets.

• Periodic inventory system

• Perpetual inventory system

Which of the following inventory costing method will show the same ending inventory value for both inventory system?

• FIRST-IN, FIRST-OUT (FIFO)

• LAST-IN, FIRST-OUT (LIFO)

• WEIGHTED-AVERAGE