assets in accounting coursera week 2 quiz answers

Merchandise Inventory Quiz

1. The goods held by a business with the intent to sell to customers to earn revenue is defined as:

  • Manufacturing inventory
  • Merchandising inventory
  • Warehouse inventory

2. True or false. A perpetual inventory system is one that updates the inventory account at specified intervals.

  • True
  • False

3. The inventory cost flow assumption which supposes that inventory flows through the system from oldest to newest is defined as what assumption?

  • First In, First Out (FIFO)
  • Last In, First Out (LIFO)

Costing Methods Quiz

4. When raw materials are purchased, the entry is a ____ to raw materials and a _____ to accounts payable or cash.

  • Credit; Debit
  • Debit; Credit

5. The average cost is reached by dividing the total _____ of goods by the total ____ of goods over a specific accounting cycle.

  • Cost; Number
  • Number; Cost

6. True or False: With the average costing method, if we have the total cost for making a good, we can find the average cost of making a finished good and the individual price of the raw materials are not relevant to this costing method.

  • True
  • False

Inventory Errors Quiz

7. If an inventory error overstates the beginning inventory, which of the following is true?

  • The cost of goods sold will be understated and the net income will be overstated.
  • The cost of goods sold will be overstated and the net income will be overstated.
  • The cost of goods sold will be understated and the net income will be understated.
  • The cost of goods sold will be overstated and the net income will be understated.

8. On a balance sheet, which of the following is not affected by an inventory error?

  • Assets
  • Liabilities
  • Equity

Shuffle Q/A 1

9. True or false. Inventory errors will self-correct after two years (assuming no other errors occur).

  • True
  • False

Inventory Accounting Methods Assessment

10. The following is true of inventory in a merchandise business.

Select all that apply.

  • It is considered an asset on the balance sheet
  • When sold, there should always be two journal entries. 
  • It is raw materials used to create a finished product 
Next

Leave a Reply