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ACCTG 211 Inventory Valuation

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  • 1. Multiple Choice
    30 seconds
    1 pt
    Which of the following assets must be reported at the  lower-of-cost-or-market value?
    AR
    Merchandise Inventory
    Prepaid Insurance
    Notes Receivable
  • 2. Multiple Choice
    30 seconds
    1 pt
    Misty, Inc. had  24,000 units of ending inventory that were recorded at the cost of  $8.00 per unit using the FIFO method. The current replacement cost is  $4.50 per unit. Which of the following amounts would be reported as Ending Merchandise Inventory on the balance sheet using the  lower-of-cost-or-market rule?
    $192,000

    $216,000

    $108,000

    $300,000
  • 3. Multiple Choice
    30 seconds
    1 pt
    When a company uses the perpetual inventory​ method, which of the following would be the entry to adjust inventory to​ lower-of-cost-or-market?
    debit Merchandise Inventory and credit Cost of Goods Sold
    debit Loss on Inventory and credit Merchandise Inventory
    debit Merchandise Inventory and credit Inventory Adjustment
    debit Cost of Goods Sold and credit Merchandise Inventory
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