ACCT 2110 EXAM 4 PRACTICE TEST QUESTIONS WITH
VERIFIED ACCURATE ANSWERS
1. Which of the following types of inventory accounts would be used by
a wholesaler or retailer?: merchandise inventory
2. The inventory account a manufacturer uses to record the cost of products
completed and available for sale is called: finished goods inventory
3. Items should be included as part of the company's inventory if they are: pur-
chased from a creditor, although not paid for by year end.
4. Determine the amount of inventory on the balance sheet of a manufacturing
company from the following account balances:
Finished goods $24,000 Merchandise inventory $50,000 Raw materials
30,000 Work-in-process 6,000: $60,000
5. A manufacturing company reported total inventory of $75,000. Assuming the
following account balances, what is this company's work-in- process invento-
ry?
Finished goods $15,000 Merchandise inventory $10,000 Raw materials
$40,000: $20,000
6. Which of the following accounts would most likely appear on the income
statement of a merchandise company but not on the income statement of a
service company?: cost of goods sold
7. Which of the following best describes "cost of goods available for sale"?:
Cost of goods available for sale is allocated into cost of ending inventory and cost of goods sold.
8. Bihary Company has a beginning balance in its inventory account of $2,250
and the ending balance is $1,500. Cost of goods sold is $9,750. According to
the cost of goods sold model, what was the amount of inventory purchased
during the year?: $9,000
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, 9. Cost of goods sold is equal to: the cost of merchandise purchased plus transportation costs plus
beginning inventory minus purchase returns and allowances and purchased discounts minus ending inventory.
10. In a periodic inventory system, the cost of purchases is recognized as: an integral
part of the calculation of cost of goods sold.
11. The cost of goods sold is equal to: the cost of goods available for sale less ending inventory.
12. Which of the following statements is false?: The cost of goods sold account is updated after
each sale of merchandise under the periodic inventory system.
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VERIFIED ACCURATE ANSWERS
1. Which of the following types of inventory accounts would be used by
a wholesaler or retailer?: merchandise inventory
2. The inventory account a manufacturer uses to record the cost of products
completed and available for sale is called: finished goods inventory
3. Items should be included as part of the company's inventory if they are: pur-
chased from a creditor, although not paid for by year end.
4. Determine the amount of inventory on the balance sheet of a manufacturing
company from the following account balances:
Finished goods $24,000 Merchandise inventory $50,000 Raw materials
30,000 Work-in-process 6,000: $60,000
5. A manufacturing company reported total inventory of $75,000. Assuming the
following account balances, what is this company's work-in- process invento-
ry?
Finished goods $15,000 Merchandise inventory $10,000 Raw materials
$40,000: $20,000
6. Which of the following accounts would most likely appear on the income
statement of a merchandise company but not on the income statement of a
service company?: cost of goods sold
7. Which of the following best describes "cost of goods available for sale"?:
Cost of goods available for sale is allocated into cost of ending inventory and cost of goods sold.
8. Bihary Company has a beginning balance in its inventory account of $2,250
and the ending balance is $1,500. Cost of goods sold is $9,750. According to
the cost of goods sold model, what was the amount of inventory purchased
during the year?: $9,000
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13
, 9. Cost of goods sold is equal to: the cost of merchandise purchased plus transportation costs plus
beginning inventory minus purchase returns and allowances and purchased discounts minus ending inventory.
10. In a periodic inventory system, the cost of purchases is recognized as: an integral
part of the calculation of cost of goods sold.
11. The cost of goods sold is equal to: the cost of goods available for sale less ending inventory.
12. Which of the following statements is false?: The cost of goods sold account is updated after
each sale of merchandise under the periodic inventory system.
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