FAR O Finals MC theories PDF

Preview

Summary

CHAPTER 10 INVENTORIES1. Which of the following should not be taken into account when determining the cost of inventory?  Recoverable purchase taxes2. The cost of inventory does not include  Abnormal amount of wasted materials3. Which of the following costs of conversion cannot be included in cost...

Description

CHAPTER 10 INVENTORIES

CHAPTER 11 INVENTORY COST FLOW

1. Which of the following should not be taken into account when determining the cost of inventory?  Recoverable purchase taxes

15. IFRS prohibits which cost flow assumption  LIFO

2. The cost of inventory does not include  Abnormal amount of wasted materials 3. Which of the following costs of conversion cannot be included in cost of inventory?  factory overhead based on normal capacity 4. Which of the following should be taken into account when determining the cost of inventory?  storage cost of part finished goods 5. Cost incurred in bringing the inventory to the present location and condition include  distribution cost 6. Inventories in compass all of the following except  Land and other property not held for sale 7. A property developer must classify properties that it holds for sale in the ordinary course of business as  Inventory 8. Factory supplies to be consumed in the production process are reported as  Inventory 9. Which of the following should not be reported as inventory  Shares and bonds held for received by a brokerage firm

16. What is the inventory pricing procedure in which the oldest costs rarely have an effect on the ending inventory?  LIFO 17. In a period of falling prices which inventory method generally provides the lowest amount of ending inventory  FIFO 18. Which inventory cost flow assumption would consistently result in the highest income in a period of inflation  FIFO 19. The costing of inventory must be deferred until the end of reporting period under which of the following method of inventory valuation?  Weighted Average 20. Cost of goods sold is the same under periodic system and perpetual system using  FIFO 21. The cost of inventories that are not ordinarily interchangeable and goods produced and segregated for specific projects shall be measured using  Specific Identification 22. Which is the reason why the specific identification method may be considered ideal for assigning cost to inventory and cost of goods sold?  The cost flow matches the physical flow

10. When determining the cost of an inventory which of the following should not be included?  Interest and loan obtained to purchase the inventory

23. IFRS requires the specific identification method in certain circumstances. Which of the following is likely to be a circumstance where the specific identification method can be used?  Unit price is low

11. Why is inventory included in the computation of net income?  To determine cost of goods sold

24. Which cost flow assumption is used for inventory when an entity builds townhouses?  Specific Identification

12. Which of the following is characteristic of a perpetual inventory system?  Cost of goods sold is recorded with each sale 13. Which of the following is incorrect about the perpetual inventory method?  Purchase returns are recorded by debiting accounts payable and crediting purchase returns and allowance

14. An entry debiting inventory and crediting cost of goods sold would be made when  Merchandise is returned on the perpetual inventory method is used...