A. hospitality firm that ordered the shipment

b. purchasing agent.

c. freight company.

d. supplier.

5. Use the LIFO method to value (at cost) the ending inventory. There was no beginning inventory. The purchases during the month were as follows:

5 units @ $2.00 apiece

10 units @ $2.10 apiece

15 units @ $2.20 apiece

If the ending inventory were 15 units, it would be valued under LIFO at:

a. $31.00.

b. $33.00.

c. $64.00.

d. none of the above.

6. The beginning inventory of a certain item for the Frolicsome Resort was 10 units, which were purchased at $10 each. It purchased 5 units at $5 apiece, and later, 3 units at $10 apiece. The resort sold a total of 8 units during the current accounting period. Which of the following inventory valuation methods yields the highest ending inventory value for this inventory item?

a. FIFO

B. LIFO

c. weighted average

d. All these methods yield the same value for ending inventory.

7. Simone computes the gross profit percentage on the basis of previous years’ figures. The fact that she is determining this percentage in this way means she must be using the _____________ method of estimating ending inventory.

a. weighted average

b. specific identification

c. retail

D. gross profit

8. Given the following information, estimate the value of ending inventory using the gross profit method:

Beginning inventory

$200

Purchases

$50

Sales

$100

Gross profit percentage

50%

a. $175

b. $200

c. $225

d. $250

9. Which of the following generally accepted accounting principles is the reason accountants calculate the lower of cost or market (LCM)?

a. matching principle

B. conservatism principle

c. going concern principle

d. full disclosure principle

10. Which of the following statements about inventory control systems is true?

a. A physical inventory of all products in storage areas is generally taken once a day.

b. A periodic inventory system indicates how much of each product is on hand by maintaining a running balance of all products entered into and issued from storage areas.

C. A perpetual inventory system eliminates the need for a monthly physical count of items in storage.

d. Staff members who maintain an operation’s perpetual inventory records should also have custody of the inventory itself.

Chapter 11 Property, Equipment, and Other Assets

B. cost

c. salvage

d. book

2. All of the following would typically be treated as revenue expenditures except the payment for a:

a. tankful of gas for a hotel’s shuttle bus.

b. $20 calculator.

C. new hotel building.

d. property tax bill.

3. Which of the following is the simplest of the methods of depreciation?

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