8) If the beginning inventory for 2006 is overstated, the effects of this
error on cost of goods sold for 2006, net income for 2006, and assets
at December 31, 2007, respectively, are
9) The accountant for the Orion Sales Company is preparing the
income statement for 2007 and the balance sheet at December 31,
2007. Orion uses the periodic inventory system. The January 1, 2007
merchandise inventory balance will appear
10) The use of a Discounts Lost account implies that the recorded cost
of a purchased inventory item is its
11) When using the periodic inventory system, which of the following
generally would NOT be separately accounted for in the computation
of cost of goods sold?
12) The use of a Purchase Discounts account implies that the recorded
cost of a purchased inventory item is its
13) In no case can "market" in the lower-of-cost-or-market rule be
more than
14) When the direct method is used to record inventory at market
15) Designated market value
16) The retail inventory method is based on the assumption that the
17) In 2006, Lucas Manufacturing signed a contract with a supplier to
purchase raw materials in 2007 for $700,000. Before the December
31, 2006 balance sheet date, the market price for these materials
dropped to $510,000. The journal entry to record this situation at
December 31, 2006 will result in a credit that should be reported
18) The gross profit method of inventory valuation is invalid when
19) Which of the following is NOT a major characteristic of a plant
asset?
20) The cost of land does NOT include
21) If a corporation purchases a lot and building and subsequently
tears down the building and uses the property as a parking lot, the
proper accounting treatment of the cost of the building would depend
on
22) To be consistent with the historical cost principle, overhead costs
incurred by an enterprise constructing its own building should be
23) When computing the amount of interest cost to be capitalized, the
concept of "avoidable interest" refers to