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Accounting for Inventory Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. Shazam Electronics is a major retailer specializing in a large variety of computer chips. All of the chips have to be stored at a specific temperature, which is a significant expense to Shazam's monthly electric bill. Which of the following categories does this expense refer to?

Question 2 2. NRV is calculated by subtracting which of the following from the sales price of an item?

Question 3 3. Which of the following accounting terms is a discount given by a merchant to a supplier for paying invoices on time?

Question 4 4. What is an advantage of using a perpetual inventory system?

Question 5 5. What type of business is most likely to use a periodic inventory system?

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Question 6 6. Which goods in transit are counted in the merchandise inventory of the buyer as soon as the items are shipped?

Question 7 7. Leno's Tux Boutique is in dire need of additional blue bow ties for the start of wedding season. He has to quickly order more for his inventory. Which of the following would NOT incur a shortage cost for the business?

Question 8 8. The return that you would expect to get on an item after the item has been sold and the cost of selling that item has been subtracted is called what?

Question 9 9. Why is inventory valuation used?

Question 10 10. Which of the following accounts are debited in a credit sale?

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Question 11 11. A customer pays cash for a custom computer at the time of sale. Which of the following accounts is debited?

Question 12 12. Which of the following activities incur ordering costs?

Question 13 13. Why should the ending inventory of the previous accounting period not just be automatically used as the beginning inventory?

Question 14 14. Which one of the following is not a name for a continuous review system?

Question 15 15. Ending inventory is the value of goods available for sale:

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Question 16 16. What do we call items that are taken from one business to another to be sold on a commission basis?

Question 17 17. If you check your inventory levels every Monday, what inventory system are you using?

Question 18 18. What is the best explanation of inventory?

Question 19 19. If ending inventory in the first quarter is $600,000 and additions during the first quarter were $300,000, what was the beginning inventory for the first quarter?

Question 20 20. In terms of calculating ending inventory, COGS stands for:

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Question 21 21. Which of the following are discounts offered to customers in exchange for paying their bill within a given time frame?

Question 22 22. Under what circumstances do errors in inventory occur?

Question 23 23. Ken is looking through the basement of his ceramics store, and he finds three obsolete plates and a bowl that has been smashed into five pieces. Which of these goods could be counted in merchandise inventory? Why?

Question 24 24. Merchandise that has been returned by a customer would fall under which category?

Question 25 25. What is an example of an asset?

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Question 26 26. How often are physical counts conducted?

Question 27 27. Which of the following is NOT an element of inventory costs?

Question 28 28. Which accounting term refers to buying items that are meant to be resold to customers?

Question 29 29. Market Ceiling is the same as what?

Question 30 30. Adding beginning balance of inventory to the cost of inventory purchases gives us the:

Accounting for Inventory Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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