(Solution) -ACC 205 Week 3 Chapter 5,6 Quiz and Video Quiz

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ACC 205 Week 3 Chapter 5,6 Quiz and Video Quiz

1. Gross Profit is ___________________.        Question 2. 2. All of the following are considered part of inventory cost except__________.         Question 3. 3. In a period of rising raw material costs the inventory cost flow assumption that will provide the firm with the highest net income would be _______________________.      
Question 4. 4. A physical inventory ______________________.     
Question 5. 5. Property, Plant, and Equipment normally includes all of the following except ___________. 
Question 6. 6. All of the following costs would be included in the cost of a piece of equipment purchased except _________________. 
Question 7. 7. When putting an asset into service the useful life is determined by all the methods below except ________________.      Question 8. 8. When selecting a depreciation method to use for depreciable equipment, all of the following would be viable alternatives except _________________.         Question 9. 9. Expenses incurred after acquisition of an asset and after it has been put into service would be ________________.      Question 10. 10. Taking a “Big Bath” when a firm incurs an impairment loss means _______________. 

Part 2

1. Multi-step income statement means many steps are involved in creating it. 
Question 2. 2. A service business would not have any inventory to sell on their books.  
Question 3. 3. FIFO inventory cost flow is used when materials received first are sold first. 
Question 4. 4. FIFO and LIFO inventory cost methods will still leave the firm with the same net income at the end of the accounting period when material costs are rising. 
Question 5. 5. Weighted Average inventory costing will always produce a higher inventory valuation than either FIFO or LIFO will. 
1. FIFO stands for Fast Inventory From Overstock. 
Question 2. 2. The inventory cost flow (FIFO/LIFO) must match the physical flow of goods. 
Question 3. 3. A firm using the perpetual inventory system will update inventory records continually. 
Question 4. 4. The specific identification method of inventory valuation would be ideal for a paint manufacturer. 
Question 5. 5. The Retail inventory method is only used by service firms. 
1. Once a useful life is established for an asset it cannot be changed. 
Question 2. 2. Once a depreciation method is chosen for an asset that depreciation method cannot be changed. 
Question 3. 3. Straight-line depreciation is the most common depreciation method in use. Question 4. 4. Double declining balance depreciation is used only when an asset is expected to decline in value rapidly due to changes in technology.    
Question 5. 5. Payment for repairs to a newly purchased piece of equipment that was damaged during shipment can also be capitalized as a necessary cost of getting the machinery functional.  
1. PPE is a catch all term used to accumulate costs for miscellaneous expense items in an organization. 
Question 2. 2. On the balance Sheet PPE items are usually listed from high cost to low cost. 
Question 3. 3. The value of a capital purchase to be recorded on the books would be the sticker price of the item purchased. 
Question 4. 4. Purchasing small hand tools for the maintenance department would be an example of a capital purchase because they can be used for more than one accounting period.     
Question 5. 5. Depreciation is a method used for a firm to calculate the FMV of an asset.