General Inventory Management MCQs

1.

Conventionally, accountants refer to the difference between sales and cost of goods sold as the ______________.

2.

In cash flow statements, reductions in inventory ___________________.

3.

At the beginning of the year, XYZ reported balances in Work in Process Inventory and Finished Goods Inventory, respectively, of $174,000 and $102,000. During the year, materials, labor, and overhead costs totaling $678,000 were added to the production. Products costing $612,000 were transferred to finished goods during the year. At the end of the year, the balance in Finished Goods Inventory is $72,000.

What amount should XYZ report as Cost of Goods Sold for the year?

4.

Which of the following is the contra account title used to record discounts for early payments for merchandise?

5.

The term "JIT Inventory" means _________________.

6.

Which of the following is NOT an example of distressed inventory?

7.

The excess of FIFO or current cost over LIFO cost of inventories is called _________________.

8.

Stored materials that will eventually become part of the goods to be produced are called _______.
  

9.

The Work in Process account would not be debited for which of the following items?

10.

Which of the following terms sometimes denotes the realized holding gain on inventory?

11.

Goods held for sale by a manufacturing concern are called _______________.

12.

The term "inventory turnover" refers to ______________________.

13.

The primary benefit of cycle counting is that __________________.
 

14.

it results in higher net income

15.

The ________________ is the difference between the current replacement cost of the ending inventory and its acquisition cost.

16.

For an auto manufacturer, steel would be considered ___________________.

17.

A stock of goods owned by a firm and held for sale to customers is called _____________.

18.

Which of the following cost flow assumptions leads to the deferral of income taxes during periods of rising prices?

19.

Losses from inventory due to theft, evaporation, and waste are called ______________.
  

20.

The term "economy of scale" refers to __________________.

21.

The procedure in which a manufacturing firm includes all production costs as a cost of the product is called _________________.

22.

Which of the following is the correct sequence of cost flows for a manufacturing firm?

23.

The term "anticipation stock" refers to _____________________.

24.

At the beginning of the year, XYZ reported balances in Work in Process Inventory and Finished Goods Inventory, respectively, of $174,000 and $102,000. During the year, materials, labor, and overhead costs totaling $678,000 were added to the production. Products costing $612,000 were transferred to finished goods during the year. At the end of the year, the balance in Finished Goods Inventory is $72,000.

What is the ending balance in the Work in Process Inventory account?

25.

Which of the following entails carrying units in inventory at their acquisition costs until they are sold?

26.

Which of the following concepts states that gains (or losses) caused by increases (or decreases) in the market value of assets should not appear in the income until a firm sells the particular assets?

27.

Which of the following cost flow assumptions assigns the costs of the earliest units acquired to the withdrawals, and the costs of the most recent acquisitions to the ending inventory?

28.

Variable costing (direct costing) is acceptable for use in determining inventory cost by _________________.

29.

Which of the following is a method for assigning cost in which a firm can physically match individual units sold with a specific purchase?

30.

The ______________________ is the estimated selling price of the inventory less any estimated costs for making the item ready for sale and actually selling it.

31.

If the ______________ is used for income tax purposes, the Internal Revenue Service requires its use for income determination for financial reports to owners.

32.

Which of the following is NOT a valid characteristic of variable costing (direct costing) for inventories for manufacturing firms?

33.

Which of the following is a predetermined estimate of what each item of manufactured inventory should cost based on past cost and planned production methods?

34.

FIFO refers to the cost of the units sold. The parallel description for ending inventory is ____________.

35.

Which of the following is the valuation basis that departs from cost when the utility of the goods is no longer as great as their cost?

36.

A predetermined estimate of what each item of manufactured inventory should cost, based on past experience and planned production methods, is called the __________________.

37.

At which of the following levels are indirect costs added to inventory?

38.

During periods of rising prices, which of the following cost flow assumptions produces the highest reported net income?

39.

For a bakery, flour would be considered _________________.

40.