Accounting > QUESTIONS & ANSWERS > AC 210 - Chapter 5-8 Practice Test with Answers (All)

AC 210 - Chapter 5-8 Practice Test with Answers

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Name ______________________________________ CWID _______________________ 1. Which of the following statements is false? a. The use of the allowance method is an attempt by accountants to match bad d ... ebts as an expense with the revenue of the period in which a sale on credit takes place. b. Under the allowance method of accounting for bad debts, the company estimates the amount of bad debts before those debts actually occur. c. In accounting for inventory, the assumed cost flow (LIFO, FIFO, average) must match the physical goods flow. d. If a company uses LIFO for tax purposes, it must also use LIFO for financial reporting purposes. 2. Use this inventory information for the month of June to answer the following question. June 1 Beginning inventory 10 units @ $120 5 Purchase 60 units @ $112 14 Sale 40 units 21 Purchase 30 units @ $116 30 Sale 28 units Assuming that a periodic inventory system is used, what is cost of goods sold on a FIFO basis? a. $7,696 b. $7,736 c. $3,664 d. $3,704 3. Use this inventory information for the month of May to answer the following question. May 1 Beginning inventory 20 units @ $76 7 Purchase 70 units @ $80 18 Sale 25 units 22 Purchase 10 units @ $88 29 Sale 40 units Assuming that a periodic inventory system is used, what is ending inventory (rounded) under the weighted average-cost method? a. $5,200 b. $5,288 c. $2,848 d. $2,800 https://www.coursehero.com/file/10528975/Chapter-5-8-Practice-Test-with-Answers/ This study resource was shared via Cour [Show More]

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