76. A company just starting business made the following four inventory purchases in June:
June1150 units¥ 5,200
June10200 units7,800
June15200 units8,400
June28150 units 6,600
¥28,000
A physical count of merchandise inventory on June 30 reveals that there are 100 units on hand. The inventory method which results in the highest gross profit for June is
a.the FIFO method.
b.the specific identification method.
c.the average-cost method.
d.not determinable.
77. A company purchased inventory as follows:
200 units at $5
300 units at $6
The average unit cost for inventory is
a.$5.00.
b.$5.50.
c.$5.60.
d.$6.00.
78. The cost of goods available for sale is allocated between
a.beginning inventory and ending inventory.
b.beginning inventory and cost of goods on hand.
c.ending inventory and cost of goods sold.
d.beginning inventory and cost of goods purchased.
79. Ted's Used Cars uses the specific identification method of costing inventory. During March, Ted purchased three cars for $8,000, $10,000, and $13,000, respectively. During March, two cars are sold for $11,000 each. Ted determines that at March 31, the $13,000 car is still on hand. What is Ted’s gross profit for March?
a.$3,000.
b.$4,000.
c.$1,000.
d.$9,000.
80. Of the following companies, which one would
not
likely employ the specific identification method for inventory costing?
a.Music store specializing in organ sales
b.Farm implement dealership
c.Antique shop
d.Hardware store
81. A problem with the specific identification method is that
a.inventories can be reported at actual costs.
b.management can manipulate income.
c.matching is not achieved.
d.the lower-of-cost-or-net realizable value basis cannot be applied.
82. The selection of an appropriate inventory cost flow assumption for an individual company is made by
a.the external auditors.
b.the IASB.
c.the internal auditors.
d.company management.
83. Which one of the following inventory methods is often impractical to use?
a.Specific identification
b.Average cost
c.FIFO
d.All of these answer choices are practical to use
84. The accounting principle that requires that the cost flow assumption be consistent with the physical movement of goods is
a.called the matching principle.
b.called the consistency principle.
c.nonexistent; that is, there is no accounting requirement.
d.called the physical flow assumption.
85. Which of the following statements is correct with respect to inventories?
a.The FIFO method assumes that the costs of the earliest goods acquired are the last to be sold.
b.It is generally good business management to sell the most recently acquired goods first.
c.Under FIFO, the ending inventory is based on the latest units purchased.
d.FIFO seldom coincides with the actual physical flow of inventory.