Test 3 Flashcards
If foods in transit are shipped FOB destination
the seller has title to the goods until they are delivered to the buyer
Which of the following should be included in the physical inventory of a company…
goods in transit from another company shipped FOB shipping point
Frieght terms of FOB shipping point mean that the.
buyer must bear the frieght cost
The terms FOB denotes
free on board
Under a consignment arrangement the…
co-signer has ownership until goods are sold to a customer
- Cost of goods sold is computed from the following equation?
(Beginning inventory + purchases) - Ending inventory = Cost of goods sold
The LIFO inventory method assumes that the cost of the latest units purchased are
the first to be allocated to the cost of goods sold
Which of the following statements are correct with respect to inventories
under FIFO the ending inventory is based on the latest units purchased
In periods of rising prices the inventory method which results in the inventory value is the balance sheet that is closest to the current cost is the
FIFO metho
Understanding beginning inventory will understate…
costs of goods sold
If the beginning inventory is understated by $13,000 the effect of this error in the current period is.
cost of goods sold understated-net income overstated
Overstating ending inventory will overstate all of the following except…
costs of goods sold
If employees are bonded…
they have been insured against misappropriation of assets
The entry to replenish a petty cash fund includes a credit to…
cash
A debit balance in Cash Over and Short is reoriented as a
miscellaneous expense