- Which of the following methods is appropriate for a business whose inventory consists of a relatively small number of unique, high-cost items?
| a. | average | |
| b. | specific identification | |
| c. | FIFO | |
| d. | LIFO |
Answer = b
- Merchandise inventory at the end of the year was inadvertently Which of the following statements correctly states the effect of the error on net income, assets, and owner's equity?
| a. | net income is overstated, assets are overstated, and owner's equity is understated | |
| b. | net income is understated, assets are understated, and owner's equity is overstated | |
| c. | net income is overstated, assets are overstated, and owner's equity is overstated | |
| d. | net income is understated, assets are understated, and owner's equity is understated |
Answer = c
- All of the following are documents used for inventory control except
| a. | a receiving report | |
| b. | a petty cash voucher | |
| c. | a vendor's invoice | |
| d. | a purchase order |
Answer = b
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