ACCT 5 & 6 Study

19 October 2022
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19 test answers

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inventory shrinkage
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when there is a difference between a physical count of inventory and inventory records
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LIFO
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the method of costing that will yield the largest net income when merchandise inventory is being valued at cost and the purchase price is steadily falling
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perpetual
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inventory system employing accounting records that continuously disclose the amount of inventory
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credit memo
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If merchandise sold on account is returned to the seller, the seller acknowledges the return by issuing a
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FIFO
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During a period of falling prices, the ___________ method generally results in the lowest balance sheet amount for inventory
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LIFO
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Ending inventory is made up of the oldest purchases when a company uses
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LIFO
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The inventory costing method that reports the earliest costs in ending inventory is
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credit terms
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The arrangements between buyer and seller as to when payments for merchandise are to be made
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FOB shipping point
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If title to merchandise purchases passes to the buyer when the goods are shipped from the seller, the terms are
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FOB shipping point
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If the buyer is to pay the freight costs of delivering merchandise, delivery terms are stated as
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LIFO
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Cost flow is in the reverse order in which costs were incurred when using
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LIFO
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inventory method that assigns the most recent costs to cost of merchandise sold is
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prices are increasing
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FIFO reports higher gross profit and net income than the LIFO method when
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FIFO
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Cost flow is in the order in which costs were incurred when using
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FIFO
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The inventory costing method that reports the most current prices in ending inventory is
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FIFO
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When merchandise sold is assumed to be in the order in which the purchases were made
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Cash
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Sales to customers who use bank credit cards are generally treated as
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receiving report
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a document that establishes an initial record of the receipt of the inventory
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the purchase order
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a document that authorizes the purchase of the inventory from an approved vendor