Multiple Choice

1) Under the specific-identification method, the physical flow of goods through the business will: A) have no relationship to the flow of costs through the accounting records. B) closely match the flow of costs through the accounting records. C) exactly match the flow of costs through the accounting records. D) does not apply to this scenario 2) Goods such as milk, bread, and cheese need to be sold quickly due to potential spoilage. Therefore, they would probably be costed using the: A) any method as the physical flow and the cost flow are different. B) FIFO method of inventory costing. C) average cost method of inventory costing. D) LIFO method of inventory costing. 3) Equipment sold is shown on the: A) Balance Sheet as an asset. B) Income Statement before gross profit. C) Statement of Retained Earnings. D) Income Statement after gross profit 4) A change from one costing method of inventory to another inventory costing method from one year to the next could be viewed as a violation of which accounting concept or principle? A) Conservatism C) Materiality B) Entity D) Consistency 5) One lot of merchandise was counted at $122.87. A second count of the same merchandise showed S122.00. The difference could be ignored due to: A) materiality. C) conservatism. B) consistency. D) it should not be ignored. 6) Which concept or principle of accounting do footnotes support? A) entity C) materiality B) full disclosure D) conservatism