Multiple choice

1. Merchandise inventory is 

generally valued at the price for which the goods can be sold. 

reported under the classification of Property, Plant, and Equipment on the balance sheet. 

often reported as a miscellaneous expense on the income statement.

 reported as a current asset on the balance sheet.

2. Lee Industries had the following inventory transactions occur during 2010:

UnitsCost/unit

2/1/10Purchase18$45

3/14/10Purchase31$47

5/1/10Purchase22$49

The company sold 51 units at $63 each and has a tax rate of 30%. Assuming that a periodic inventory 

system is used, what is the company's gross profit using LIFO? (rounded to whole dollars) 

$848 

$2,441 

$772 

$2,365

3. The one characteristic that all entries recorded in a multi-column purchases journal have in common is  

credit to the Cash account. 

debit to the Accounts Payable account. 

debit to the Cash account. 

credit to the Accounts Payable account.

4. The individual amounts in the Accounts Payable column in the cash payments journal are posted to  the subsidiary ledger 

weekly. 

daily. 

yearly. 

monthly.