Question

1. Which of the following would most likely use a periodic inventory system?

a) heavy metal distributor

b) computer dealership

c) local handcrafted furniture store

d) car dealership

2. If prices were rising and a Canadian company wanted to report a smaller amount of profit for tax purposes, they should use the weighted-average cost formula.

a) True

b) False

3.Once the manufacturing process is complete, the product is transferred from the Work-in-Process account to Raw Materials account.

a) True

b) False

4. All of the following are manufacturing accounts EXCEPT for

a) Work-in-Process.

b) Cost of Goods Available for Sale.

c) Finished Goods.

d) Raw Materials

5. The carrying amount of goodwill is

a) all of the other answers

b) not relevant, because goodwill is not amortized.

c) captures impairment losses.

d) none of the other answers

e) calculated using CCA.

Answer 1

Solution 1:

local handcrafted furniture store most likely use a periodic inventory system.

Hence option c is correct.

Solution 2:

False, If prices were rising and a Canadian company wanted to report a smaller amount of profit for tax purposes, they should use the LIFO formula.

Solution 3:

False, Once the manufacturing process is complete, the product is transferred from the Work-in-Process account to Finished goods inventory account.

Solution 4:

All of the following are manufacturing accounts EXCEPT for "Cost of Goods Available for Sale."

Hence option b is correct.

Solution 5:

The carrying amount of goodwill is " captures impairment losses."

Hence option c is correct.