ACC 304 help A Guide to career/Snaptutorial ACC 304 help A Guide to career/Snaptutorial | Page 29

d. Not sufficient information to determine effect on net income.
29. If a company uses the periodic inventory system, what is the
impact on the current ratio of including goods in transit f.o.b.
shipping point in purchases, but not ending inventory?
a. Overstate the current ratio.
b. Understate the current ratio.
c. No effect on the current ratio.
d. Not sufficient information to determine effect on the current ratio.
30.
What is consigned inventory?
a. Goods that are shipped, but title transfers to the receiver.
b. Goods that are sold, but payment is not required until the goods
are sold.
c. Goods that are shipped, but title remains with the shipper.
d. Goods that have been segregated for shipment to a customer.
31.
When using a perpetual inventory system,
a. no Purchases account is used.
b. a Cost of Goods Sold account is used.
c. two entries are required to record