Merchandising Operations(Chapter 5)

Question 1

Cost

of goods sold equals the number of units sold multiplied by the unit cost.

Answer 1

Correct

Question 2

Cost of goods sold equals the cost of goods available for sale less ending inventory.

Answer 2

Correct

Question 3

Under FIFO, the cost of goods sold is not base on the newest purchase.

Answer 3

correct

Question 4

The need for monthy financial statements if one of the reason a business must estimate the value of its ending inventory.

Answer 4

Correct

Question 5

The specific unit cost method is also ccalled?

Answer 5

The specific identification method.

Question 6

Inventory

Answer 6

core of any retail operation

Question 7

FIFO Method

Answer 7

First in, first out. Assumes that the earliest goods purchased are the first to be sold.

Question 8

Weighted-average method

Answer 8

Method of process costing that blends together units and costs from both the current and prior periods.

Question 9

LIFO method

Answer 9

Assumes that the latest goods purchased are the first to be sold.

Question 10

Consistency Principle

Answer 10

A company should use the same accounting methods and principles from year to year.

Question 11

Materiality Concept

Answer 11

A company must perform strictly proper accounting only for items that are significant to the business financial situations.

Question 12

Inventory Costing Method

Answer 12

That is used to determine the amount of cost of goods sold and ending merchandise inventory.

Question 13

Cost of goods available for sale

Answer 13

The total cost spent on inventory that was available to be sold during a period.

Question 14

Gross Profit Method

Answer 14

Estimate of EMI on the vasis of the COGS formula and the Gross profit percentage