1. When a company sells goods, it removes their cost from the balance sheet and reports the cost on the income statement as:
a.Selling Expenses.
b.Cost of Goods Sold.
c.Finished Goods Inventory.
d.Inventory.
2. If inventory is updated periodically, which of the equations is correct?
a.Cost of goods sold = Beginning inventory + Purchases − Ending inventory
b.Cost of goods sold = Beginning inventory + Purchases + Ending inventory
c.Beginning inventory + Purchases = Ending inventory
d.Ending inventory = Beginning inventory + Purchases + Cost of goods sold
3. Assume a periodic inventory system is used. Which inventory costing method generally results in the most recent costs being assigned to ending inventory?
a.LIFO
b.FIFO
c.Weighted average cost
d.Simple average cost
4. Assume a periodic inventory system is used. The LIFO inventory costing method assumes that the cost of the units most recently purchased is the:
a.last to be assigned to cost of goods sold.
b.first to be assigned to ending inventory.
c.first to be assigned to cost of goods sold.
d.last to be assigned to units available for sale.