Accounting II - Chapter 20 Review Exam |
Questions with 100% Correct Answers | Verified |
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Practice questions for this set
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A merchandise inventory that is smaller than needed may decrease net
income.
Choose an answer
Last-in, first-out inventory costing
1 2 FALSE
method (LIFO)
Gross profit method of estimating
3 4 TRUE
inventory
Don't know?
Terms in this set (25)
, Last-in, first-out inventory costing Using the price of merchandise purchased last to
method (LIFO) calculate the cost of merchandise sold first.
Weighted-average inventory costing Using the average cost of beginning inventory plus
method merchandise purchased during a fiscal period to
calculate the cost of merchandise sold.
Stock ledger A file of stock records for all merchandise on hand.
Inventory record A form used during a physical inventory to record
information about each item of merchandise on
hand.
Gross profit method of estimating Estimating inventory by using the previous year's
inventory percentage of gross profit on operations.
Stock record A form used to show the kind of merchandise,
quantity received, quantity sold, and balance on
hand.
Lower cost of market inventory Using the lower of cost or market price to calculate
costing method (LCM) the cost of ending merchandise inventory.
Market value The price that must be paid to replace an asset.
First-in, first-out inventory costing Using the price of merchandise purchased first to
method (FIFO) calculate the cost of merchandise sold first.
TRUE The gross profit method of estimating inventory
makes it possible to prepare monthly income
statements without taking a physical inventory.
Questions with 100% Correct Answers | Verified |
Latest Update 2026
Save
Practice questions for this set
Learn 1 /7 Study using Learn
A merchandise inventory that is smaller than needed may decrease net
income.
Choose an answer
Last-in, first-out inventory costing
1 2 FALSE
method (LIFO)
Gross profit method of estimating
3 4 TRUE
inventory
Don't know?
Terms in this set (25)
, Last-in, first-out inventory costing Using the price of merchandise purchased last to
method (LIFO) calculate the cost of merchandise sold first.
Weighted-average inventory costing Using the average cost of beginning inventory plus
method merchandise purchased during a fiscal period to
calculate the cost of merchandise sold.
Stock ledger A file of stock records for all merchandise on hand.
Inventory record A form used during a physical inventory to record
information about each item of merchandise on
hand.
Gross profit method of estimating Estimating inventory by using the previous year's
inventory percentage of gross profit on operations.
Stock record A form used to show the kind of merchandise,
quantity received, quantity sold, and balance on
hand.
Lower cost of market inventory Using the lower of cost or market price to calculate
costing method (LCM) the cost of ending merchandise inventory.
Market value The price that must be paid to replace an asset.
First-in, first-out inventory costing Using the price of merchandise purchased first to
method (FIFO) calculate the cost of merchandise sold first.
TRUE The gross profit method of estimating inventory
makes it possible to prepare monthly income
statements without taking a physical inventory.
