ACCOUNTING 200 EXAM 5 ACTUAL SCRIPT
2026 COMPLETE QUESTIONS AND CORRECT
ANSWERS GRADED A+
◉ Revenue Recognition Principle.
Answer: The principle that companies recognize revenue in the
accounting period in which the performance obligation is satisfied.
accrual basis
◉ FIFO method.
Answer: First-in First-out: milk. oldest in stored in front and with
newer in the back. value of ending inventory comes from last in.
◉ LIFO method.
Answer: last in first out: tires, newest stored in front and oldest
stored in back. value of ending inventory comes from first in.
◉ value of ending inventory for fifo comes from.
Answer: last in
◉ value of ending inventory for lifo comes from.
Answer: first in
,◉ Weighted Average Unit Method.
Answer: a process costing method that blends together units and
costs from both the current and prior periods
◉ in a period of inflation which cost flow method has highest COGS?.
Answer: LIFO
◉ in a period of inflation which cost flow method has highest EI?.
Answer: FIFO
◉ in FOB shipping point ownership passes when.
Answer: goods are shipped
◉ in FOB shipping point who pays for shipping.
Answer: buyer
◉ in FOB destination ownership passes when.
Answer: goods arrive to buyer
◉ in FOB destination who pays for shipping.
Answer: seller
, ◉ if ending inventory is understated, COGS is.
Answer: overstated
◉ if ending inventory is understated, net income is.
Answer: understated because COGS is overstated
◉ if ending inventory is overstated, stockholders equity is.
Answer: understated because net income is understated
◉ if ending inventory is understated, assets are.
Answer: understated
◉ Issues with high inventory levels.
Answer: storage cost, interest cost, funds tied up in inventory, cost
associated with obsolescence.
◉ Issues with low inventory levels.
Answer: lost sales
◉ if the value of the inventory is lower than it's cost.
Answer: it must be written down to market value
2026 COMPLETE QUESTIONS AND CORRECT
ANSWERS GRADED A+
◉ Revenue Recognition Principle.
Answer: The principle that companies recognize revenue in the
accounting period in which the performance obligation is satisfied.
accrual basis
◉ FIFO method.
Answer: First-in First-out: milk. oldest in stored in front and with
newer in the back. value of ending inventory comes from last in.
◉ LIFO method.
Answer: last in first out: tires, newest stored in front and oldest
stored in back. value of ending inventory comes from first in.
◉ value of ending inventory for fifo comes from.
Answer: last in
◉ value of ending inventory for lifo comes from.
Answer: first in
,◉ Weighted Average Unit Method.
Answer: a process costing method that blends together units and
costs from both the current and prior periods
◉ in a period of inflation which cost flow method has highest COGS?.
Answer: LIFO
◉ in a period of inflation which cost flow method has highest EI?.
Answer: FIFO
◉ in FOB shipping point ownership passes when.
Answer: goods are shipped
◉ in FOB shipping point who pays for shipping.
Answer: buyer
◉ in FOB destination ownership passes when.
Answer: goods arrive to buyer
◉ in FOB destination who pays for shipping.
Answer: seller
, ◉ if ending inventory is understated, COGS is.
Answer: overstated
◉ if ending inventory is understated, net income is.
Answer: understated because COGS is overstated
◉ if ending inventory is overstated, stockholders equity is.
Answer: understated because net income is understated
◉ if ending inventory is understated, assets are.
Answer: understated
◉ Issues with high inventory levels.
Answer: storage cost, interest cost, funds tied up in inventory, cost
associated with obsolescence.
◉ Issues with low inventory levels.
Answer: lost sales
◉ if the value of the inventory is lower than it's cost.
Answer: it must be written down to market value
