21) The accounting principle that states that we should never anticipate gains is which of the following?
A) Accounting conservatism
B) Materiality concept
C) Disclosure principle
D) Consistency principle
22) Which of the following concepts states that a company must perform strictly proper accounting ONLY for significant items?
A) Accounting conservatism
B) Materiality concept
C) Disclosure principle
D) Consistency principle
Learning Objective 6-2
1) Ending inventory equals the number of units on hand multiplied by the unit cost.
2) Ending inventory equals the cost of goods available for sale less beginning inventory.
3) Under Last-In, First-Out, the Cost of goods sold is based on the oldest purchases.
4) The various costing methods are necessary because the cost per unit of acquiring new inventory fluctuates frequently.
5) When a company uses FIFO, the cost of goods sold correlates to the most recently purchased goods, and the ending inventory correlates to the oldest goods in stock.
6) When a company uses LIFO, the cost of goods sold correlates to the most recently purchased goods, and the ending inventory correlates to the oldest goods in stock.
7) The specific-unit-cost method of inventory costing is recommended when a business deals in unique and high-priced inventory items.
8) Which of the following inventory costing methods is based on the actual cost of each particular unit of inventory?
A) Specific-unit-cost
B) Average-cost
C) Last-In, First-Out
D) First-In, First-Out