CHAPTER QUIZ #2 (Chapters 6 8) Record your answer on your Scantron form 1. Segre
ID: 2488924 • Letter: C
Question
CHAPTER QUIZ #2 (Chapters 6 8) Record your answer on your Scantron form 1. Segregation of duties means that a company assigns responsibilities so that A. sufficient workers are available to cover all necessary jobs. B. responsibilities for related activities are assigned to two or more people. employees are restricted to jobs for which they have adequatetraining. D. workers are divided into those who do the same tasks but on different days. 2. The perpetual inventory method of tracking inventory is considered superior to the periodic method because the perpetual method: A. makes calculations easier and less technology can be deployed RB. tells what inventory a company should have at any point in time. C. saves a company from ever having to count the goods in inventory. D. is more consistent with how companies calculated inventory in the past. 3. Bijoux Company has sales of $40,000, beginning inventory of $5,000, purchases of $25,000, and ending inventory of $7,000. The cost of goods sold is: A) $23,000 B) $30,000 C) $40,000 D) $17,000 4. Goods placed in inventory are initially recorded at: A. market value. B. the amount paid to acquire the asset. © the amount paid to prepare the asset for sale to customers. D. the amount paid to acquire the asset and prepare it for sale to customers. 5. Axle Inc. updates its inventory perpetually. Its beginning inventory is $35,000, goods purchased during the period cost $120,000, and the cost of goods sold for the period is $140,000. What is the amount of the ending inventory? A. $45,000 B. $20,000 C. $25,000 D. $15,000 When a company has inventory which is subject to gradually increasing prices, the use of the LIFO method of valuing inventory will result in the: A. lowest amount of assets and the highest amount of net income. 6. A B. lowest amount of assets and the lowest amount of net income -8. lowest amount of assets and the lowest amount of net income. C. highest amount of assets and the lowest amount of net income. D highest amount of assets and the highest amount of net income.Explanation / Answer
1)
A) Sufficient workers are available to cover all necessary jobs.
2)
C) saves a company from ever having to count the goods in inventory.
3)
COGs = Beginning inventory + purchases - ending inventory
= 5000 + 25000 - 7000
= 23,000
4)
The amount paid to acquire the asset
5)
COGs = Beginning inventory + purchases - ending inventory
ENding inventory = Beginning inventory + purchases - COGS
= 35,000 + 120,000 - 140,000
= 15,000
6)
Lowest amount of asset and lowest amount of net income
LIFO last in first out , the higher inventory cost will result in higher cost of goods sold thus lower net income.