Question

9) In a periodic inventory system using First In, First Out (FIFO)

A) The ending inventory will be made up of the most recently bought items

B) The ending inventory will be made up of the earliest bought items

C) The ending inventory will be made up of the average cost of the items

D) The ending inventory will be made up of only the beginning items

10) In a periodic inventory system using Last In, First Out (LIFO)

A) The ending inventory will be made up of the most recently bought items

B) The ending inventory will be made up of the beginning and earliest bought items

C) The ending inventory will be made up of the average cost of the items

D) The ending inventory will be made up of only the beginning items

11) An error in the ending inventory for one month

A) Will only affect that month

B) Will affect that month and the following month because this month’s ending inventory is next month’s beginning inventory

C) Will use up all the company’s cash

D) Will make the company’s rent higher

12) One disadvantage of the perpetual inventory system is

A) Stolen or broken inventory items may not be discovered for a long time because only one physical count is required in the year

B) It lasts too long

C) It requires the use of only very experienced cashiers

D) It always requires an electronic point of sale system

Answer 1

9. In a periodic inventory system using First In, First Out (FIFO), The ending inventory will be made up of the most recently bought items.

10. In a periodic inventory system using Last In, First Out (LIFO), The ending inventory will be made up of only the beginning items.

11. An error in the ending inventory for one month Will affect that month and the following month because this month’s ending inventory is next month’s beginning inventory.

12. One disadvantage of the perpetual inventory system is that the Stolen or broken inventory items may not be discovered for a long time because only one physical count is required in the year.