Chapter 4 152 MULTIPLE CHOICES - THEORETICAL 1. The costing method that considers materials on hand to be from the last ones purchased is: LIFO b. FIFO C. Moving average Specific identification 2. Under what costing method are the materials on hand considered to be from the first ones purchased? FIFO b. LIFO c. Moving average d. Specific identification 3. Which inventory costing method charges current costs against current revenues? a. FIFO b. LIFO c. Moving average d. Specific identification 4. When must a new unit cost be calculated under the moving average method? a. After each issue. b. After each receipt. C. Before each issue. d. Before each receipt. 5. How is a loss on inventory write-down shown on the statement of comprehensive income? a. as a deduction from the cost of goods sold. b. as an addition to the cost of goods sold. c. as a deduction from the sales revenue. d. as an addition to sales revenue.The costing method that is no longer permitted by PAS No. 2 18: a. FIFO b. LIFO c. Moving average d. Specific identification . How is recovery from a decrease in the allowance for the reduction of inventory to NRV shown? a. Deduction from the sales revenue. b. Addition to sales revenue. c. Deduction from cost of goods sold. d. Addition to cost of goods sold. 8. In period of rising prices, what effect would the use of FIFO have on the net income of a company? a. No effect. b. The net income increases. c. The net income decreases. d. There will be a loss. 9. How is the allowance for inventory write-down shown in the statement of financial position? a. As a deduction from the inventory at cost. b. As a deduction from the inventory of NRV. C. As an asset. d. As a liability. 10. What is the major advantage of using a perpetual inventory system? a. It provides efficient internal control over materials. b. It avoids inventory shortages and overages. C. It minimizes error in posting receipts and issues of materials. d. It avoids losses due to theft.1) The person who is responsible for the protection of the materials in the storeroom, and for identification of the materials is the: a. Receiving clerk b. Purchasing agent c. Storeroom supervisor d. Storeroom clerk 2) The bin tag: a. Is an informal but carefully maintained record showing the quantities of the materials received, issued and on hand. b. Is a name tag used by employees for identification purposes. c. Is a record of materials requisitions. d. Is a record showing the vouchers issued. 3) No materials may be issued without a written document called the: a. Materials requisition b. Materials issued c. Material ledger card d. Receiving report 4) Materials requisition should indicate the following except: a. Quantity b. Material number c. Job number d. Purchase order number 5) The person who is responsible for recording the requisition in the materials ledger card is the: a. Storeroom supervisor b. Storeroom clerk c. Purchasing agent d. Accounting clerk