ACCT 3330 unit 8 quiz

Lower of cost and net realizable value

is most conservative if applied to individual items of inventory.

All else being equal, which of the following statements with respect to the impact of inventory errors is NOT correct?

An overstatement of ending inventory will result in an understatement of income.

Which of the following does NOT correctly describe a periodic inventory system?

Cost of goods sold is calculated every time a sale is made.

Which of the following does NOT correctly describe the weighted average cost formula?

It prices inventory on the basis of the average cost of beginning inventory.

Which of the following is correct?

Manufacturing overhead costs are product costs.

Not using the net method because of difficulties that may arise is a good example of applying

the cost/benefit constraint.

The cost of goods available for sale is calculated as

beginning inventory plus the cost of goods acquired during the period.

The inventory turnover ratio is calculated as

cost of goods sold divided by average inventory.

Goods in transit which are shipped f.o.b. destination should be included

in the inventory of the seller.

Wilma received merchandise on consignment from Bubbles. As of January 31, Wilma included the goods in inventory, but did not record the transaction. The effect of this on Wilma 's financial statements for January 31 would be

net income, current assets, and retained earnings were overstated.