Quiz: Chapter 6 Quiz
Lakeside Software began January with $3,900
of merchandise inventory. During January, Lakeside made the following entries for its inventory
transactions:
Accounts Debit Credit
Inventory 6,000
Accounts Payable 6,000
Accounts Receivable 7,500
Sales Revenue 7,500
Cost of Goods Sold 5,600
Inventory 5,600
1. What was Lakeside's gross profit for January?
a. Q
b. Q
c. Q
d. Q
2. When does the cost of inventory become an expense?
a. When cash is collected from the customer
b. When inventory is delivered to a customer
c. When payment is made to the supplier
d. When inventory is purchased from the supplier
3. The word market as used in "the lower of cost or market" generally means.
a. net realizable value.
b. liquidation price.
c. Retail market price
d. Original cost.
4. The Corner Frame Shop wants to know the effect of different inventory costing methods on its
financial statements. Inventory and purchases data for June are:
Units Unit Cost Total Cost
Jun 1 Beginning inventory 2,500 $11.00 $27,500
Jun 4 Purchase 1,800 $11.80 21,240
Jun 9 Sale (1,900)
If The Corner Frame Shop uses the LIFO method, cost of goods sold will be
a. 21,200
b. 21240
c. 20900
d. 2340
5. The Corner Frame Shop wants to know the effect of different inventory costing methods on its
financial statements. Inventory and purchases data for June are:
Units Unit Cost Total Cost
Jun 1 Beginning inventory 2,500 $11.00 $27,500
Jun 4 Purchase 1,800 $11.80 21,240
Jun 9 Sale (1,900)
If The Corner Frame Shop uses the LIFO method, cost of goods sold will be
a. 21,200
b. 20900
c. 21240
d. 27840
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