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Asset & Inventory Management 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. What is the total dollar amount that is attributed to the inventory on hand called?

Question 2 2. Which of the following requires that on hand inventory at the end of an accounting period be valued at the lower of cost or market?

Question 3 3. I have 10 scarves left in inventory at the end of the accounting period. I paid my supplier $5 per scarf. It cost $18 to ship the scarves and $13 to store the scarves. The market value of the scarves is $8.50. I expect to incur $1.30 per scarf in selling expenses. I am selling the scarves for $10.00 each. What is the total cost of the scarves, and what is the price that is used for inventory valuation based on the Lower of Cost or Market rule?

Question 4 4. Which of the following is true of the beta coefficient?

Question 5 5. Which of the following is an advantage of using the CAPM?

Page 2

Question 6 6. Willy's Motor Company, with a beta coefficient of 1.34, is which kind of investment relative to the market average?

Question 7 7. Which of the following is one of the major categories of non-current assets?

Question 8 8. A non-current asset is one that ____ have it's value fully realized within one year.

Question 9 9. Which of the following is not a non-current asset?

Question 10 10. Bob is selling coffee makers at his home store. Bob bought his coffee maker from the manufacturer for $25. Bob sells these coffee makers for $60. In this particular instance, the preparation to sell the coffee maker cost $5, and the commission he paid the employee who sold it was $8.50. What is the NRV in this instance?

Page 3

Question 11 11. What concept states that inventory is valued at the lower of the total cost of purchasing the material or the current market replacement cost?'

Question 12 12. The current market price of an item falls between the market ceiling and the market floor. What price is used to value the inventory?

Question 13 13. Which of the following financial statements give the best picture of an organizations financial status?

Question 14 14. Which of the following must always be classified as a current asset?

Question 15 15. Which of the following is classified as a current asset?

Page 4

Question 16 16.

Brady's Plumbing has the following assets listed on the balance sheet:

Cash $1000

Accounts Receivable $5000

Inventory $1500

Equipment $15,000

What are the total assets for Brady's Plumbing?

Question 17 17. Total assets are the sum of noncurrent assets and __________.

Question 18 18. How are the assets that are used in the calculation of total assets valued?

Question 19 19. Return on Assets measures how well a company uses its assets to generate _____.

Question 20 20. The _____ is the financial statement that tells how much money a company made or lost in a given time period.

Page 5

Question 21 21. The _____ is the financial statement that lists all of a company's accounts and the balances in them.

Question 22 22. Patents and trademarks are:

Question 23 23. Business assets are:

Question 24 24. Which of these statements is NOT true about business assets?

Question 25 25. What is the replacement cost of inventory called?

Page 6

Question 26 26. Grab a calculator and let's use the CAPM. If the risk-free rate (as reflected by Company X returns) is 0.10, the average market return (as indicated by the 1-year return on Company Z) is 20.63, and Pear Products has a beta coefficient of 0.74, the appropriate required return for Pear Products (rounded to two decimal places) is:

Question 27 27. Which of the following is an example of a non-current asset?

Question 28 28. NRV is calculated by subtracting which of the following from the sales price of an item?

Question 29 29. What is a Current Asset?

Question 30 30. Total assets are reported on which of the following financial statements?

Asset & Inventory Management 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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