Day 14

Question 1

What is the difference between FOB Shipping Point and FOB Destination?

Answer 1

FOB Shipping Point- Title passes to the buyer when the seller delivers the goods to a common carrier

FOB Destination - Title passes to the buyer when the buyer receives the goods from a common carrier

Question 2

True or False: Replacement cost can be used in inventory valuation under Lower of Cost or Net Realizable Value?

Answer 2

False

MCQ-06042

Question 3

Define: Market Value

Answer 3

Middle Value - of an inventory item’s replacement cost, its market ceiling, and its market floor

MCQ-08591

Question 4

Define: Market Ceiling

Answer 4

Net Realizable Value - Net selling price less the costs to complete

MCQ-08591

Question 5

Define: Market Floor

Answer 5

Net Realizable Value less normal Profit Margin

MCQ-08591

Question 6

If a firm’s ending inventory balance was overstated by $1,000, what is correct according to a periodic inventory system?

Answer 6

RE was overstated by $1,000

Implies that COGS is understated by $1,000 = Net Income is understated by $1,000

MCQ-08565