Accounting 1 Milestone 3
1
Compute the correct Cost of Goods Sold in September using the FIFO method, based on the information
in the table above.
$3,910
$2,630
$1,865
$1,805
CONCEPT
FIFO
2
Which one of the businesses below would most likely use the FIFO method of inventory valuation?
Stone and brick
company Petroleum
company Luxury car
dealership Produce
stand
CONCEPT
Inventory Cost Flow Assumptions
3
Acme Furniture purchased 10 desks for $100 each and paid the invoice in full within 20 days, which
reduced the price of each desk to $90.
Which of the following amounts would be recorded in the purchases account of Acme Furniture?
$100
$1,000
$200
$900
CONCEPT
Merchandising: Purchases, Sales, Discounts, Returns and Allowance
4
Brett agreed to the freight on board (FOB) destination method for an order of t-shirts that is ready
to ship. The freight is in New York, at the port of distribution, to be delivered to Brett's clothing
store in Pennsylvania.
, Who owns the freight at the loading docks in New York?
Brett
The supplier
The shipping company
Brett's customer
CONCEPT
Merchandising
5
If Kevin purchased 175 candles at $3 each and sold 90 candles for $7 each, which of the following is his
cost of goods sold?
$270
$630
$735
$525
CONCEPT
Merchandising
6
In 2011, Matt's hunting store sold goods that cost $89,000, and had expenses that totaled $12,000. His
average stock of goods during 2011 was $45,000.
Which of the following is Matt’s hunting store inventory turnover ratio in 2011?
3.75
1.98
6.42
1.71
CONCEPT
Merchandising Financial Statement Analysis
7
Which inventory method was used to calculate cost of goods sold, based on the information above?
Weighted average
Specific ID
FIFO
LIFO
1
Compute the correct Cost of Goods Sold in September using the FIFO method, based on the information
in the table above.
$3,910
$2,630
$1,865
$1,805
CONCEPT
FIFO
2
Which one of the businesses below would most likely use the FIFO method of inventory valuation?
Stone and brick
company Petroleum
company Luxury car
dealership Produce
stand
CONCEPT
Inventory Cost Flow Assumptions
3
Acme Furniture purchased 10 desks for $100 each and paid the invoice in full within 20 days, which
reduced the price of each desk to $90.
Which of the following amounts would be recorded in the purchases account of Acme Furniture?
$100
$1,000
$200
$900
CONCEPT
Merchandising: Purchases, Sales, Discounts, Returns and Allowance
4
Brett agreed to the freight on board (FOB) destination method for an order of t-shirts that is ready
to ship. The freight is in New York, at the port of distribution, to be delivered to Brett's clothing
store in Pennsylvania.
, Who owns the freight at the loading docks in New York?
Brett
The supplier
The shipping company
Brett's customer
CONCEPT
Merchandising
5
If Kevin purchased 175 candles at $3 each and sold 90 candles for $7 each, which of the following is his
cost of goods sold?
$270
$630
$735
$525
CONCEPT
Merchandising
6
In 2011, Matt's hunting store sold goods that cost $89,000, and had expenses that totaled $12,000. His
average stock of goods during 2011 was $45,000.
Which of the following is Matt’s hunting store inventory turnover ratio in 2011?
3.75
1.98
6.42
1.71
CONCEPT
Merchandising Financial Statement Analysis
7
Which inventory method was used to calculate cost of goods sold, based on the information above?
Weighted average
Specific ID
FIFO
LIFO
