QUIZ 1 - CHAPTER 8 & 9

In a manufacturing business, inventory that is ready for sale is called

• Raw Material.

• Finished Goods.

• Work in Process.

• Cost of Goods Sold.

Which of the following accounts does NOT exist in a perpetual inventory system?

• Inventory.

• Cost of Goods Sold.

• Sales Returns and Allowances.

• Purchases.

Under a perpetual inventory system which account should be debited to record sales on account?

• Accounts Payable.

• Purchases.

• Accounts Receivable.

• Inventory.

When an item is purchased, what system is used if the journal entry is Purchases Account to be debited and Accounts Payable to be credited?

• Last-in, First-out (LIFO).

• Periodic.

• Perpetual.

• First-in, First-out (FIFO).

The Last-in, First-out (LIFO) inventory method assumes that the cost of the latest units purchased are

• the last to be allocated to cost of goods sold.

• the first to be allocated to ending inventory.

• the first to be allocated to cost of goods sold.

• not allocated to cost of goods or ending inventory.

The ending inventory value comprises costs from the earliest purchases. This statement refers to the

• Last-in First-out (LIFO) method.

• First-in First-out (FIFO) method.

• Weighted Average method.

• Moving Average method.

Which statement is not true about capital expenditure?

• Recorded in Statement of Financial Position.

• Increase the business assets.

• The benefit of which is received over a period of more than one year.

• Decrease the business profit.

Below are the cost incurred to determine the cost of vehicle except

• Sales tax.

• Price as per invoice.

• Insurance and Road tax for the first time.

• Lubricant.

Depreciation is a process of

• Asset Devaluation.

• Cost Accumulation.

• Cost Allocation.

• Asset Valuation.

Which of the following statement is true about depreciation.

• Depreciation of asset will be disclosed in Statement of Comprehensive Income.

• Depreciation of asset will increase net profit.

• Depreciation of asset is a capital expenditure

• Depreciation of asset will be disclosed in Statement of Financial Position.