财务会计英语-练习及答案ch09.docVIP

CHAPTER 9 INVENTORIES Chapter 9—Inventories TRUE/FALSE 1. Transportation-in is considered a cost of purchasing inventory. ANS: T DIF: 1 OBJ: 01 2. In many retail businesses, inventory is the largest current asset. ANS: T DIF: 2 OBJ: 01 3. As inventory is sold in many retail businesses, the largest expense is created. ANS: T DIF: 2 OBJ: 01 4. The cost of merchandise inventory is limited to the purchase price less any purchase discounts. ANS: F DIF: 2 OBJ: 01 5. A business using the perpetual inventory system, with its detailed subsidiary records, does not need to take a physical inventory. ANS: F DIF: 2 OBJ: 01 6. One of the two internal control procedures over inventory is to properly report inventory on the financial statements. ANS: T DIF: 2 OBJ: 01 7. A detective internal control is designed to find an error or misstatement after it has occurred. ANS: T DIF: 2 OBJ: 01 8. A perpetual inventory system is an effective means of control over inventory. ANS: T DIF: 2 OBJ: 01 9. A subsidiary inventory ledger can be an aid in maintaining inventory levels at their proper levels. ANS: T DIF: 1 OBJ: 01 10. Title to merchandise shipped FOB shipping point passes to the buyer upon delivery of the merchandise to the buyers place of business. ANS: F DIF: 2 OBJ: 01 11. Purchased goods in transit should be included in the ending inventory if the goods were shipped FOB shipping point. ANS: T DIF: 2 OBJ: 01 12. Purchased goods in transit, shipped FOB destination, should be excluded from ending inventory. ANS: T DIF: 2 OBJ: 01 13. A consignor who has goods out on consignment with an agent should include the goods in ending inventory even though they are not in the possession of the consignor. ANS: T DIF: 2 OBJ: 01 14. Unsold consigned merchandise should be included in the consignees inventory. ANS: F DIF: 2 OBJ: 01 15. If ending inventory for the year is understated, net income for the year is overst