METHODS OF INVENTORY

What is inventory?

• Cash on hand

• Goods and materials a business holds for resale or production

• Office supplies used for administration

• None of the above

Which of the following is NOT a classification of inventory?

• Merchandise Inventory

• Raw Materials

• Fixed Assets

• Work-in-Progress

Which inventory system updates records after each sale or purchase?

• Perpetual Inventory System

• Periodic Inventory System

• FIFO System

• LIFO System

What is the primary purpose of a physical count of inventory?

• To determine profit margins

• To check accuracy in stock levels

• To compute employee wages

• To calculate advertising expenses

Which inventory valuation method assumes that the most recent purchases are sold first?

• FIFO

• LIFO

• Weighted Average

• Specific Identification