Inventory System That Uses The Merchandise

1. The inventory system that uses the merchandise inventory account as an active account is called theA) Periodic system.B) Perpetual system.C) LIFO system.D) FIFO system.2. A method of valuing inventory based on the assumption that the oldest goods will be sold first is called the:A) LIFO method.B) Average cost method.C) Specific cost method.D) FIFO method.3. Cost of goods sold is shown on the: A) balance sheet as an asset.B) Income statement before gross profit.C) Statement of retained earnings.D) income statement after gross profit4. In order to pay the least income tax possible in periods of rising inventory costs, the company should use which of the following inventory costing methods?A) FIFOB) LIFOC) Average costD) Specific identification5. Ignoring a write-off of inventory that will not affect the financial statements to users of the information is an example ofA) conservatism.B) consistency.C) materiality.D) entity.6. A physical count of the inventory is taken when using which inventory system?A) Perpetual inventory systemB) Periodic inventory systemC) Both perpetual and periodic inventory systemD) Neither perpetual or periodic inventory system7. Assigning LCM to the items that make up the inventory of merchandise at the end of the accounting