Question 1

The LIFO inventory method assumes that the cost of the latest units purchased are

		the first to be allocated to ending inventory
		not allocated to cost of goods sold or ending inventory
		the last to be allocated to cost of goods sold
		the first to be allocated to cost of goods sold

4 points

Question 2

The term "payables" refers to

		cash to be paid to creditors
		cash to be paid to debtors
		amounts owed to individuals or companies
		merchandise to be collected from individuals or companies

4 points

Question 3

The consistent application of an inventory costing method enhances

		efficiency
		conservatism
		accuracy
		comparability

4 points

Question 4

From an internal control standpoint, the asset most susceptible to improper diversion and use is

		land
		prepaid insurance
		cash
		buildings

4 points

Question 5

An income statement would not include

		income from operations
		dividends paid
		other revenue and gains
		discontinued operations

4 points

Question 6

The profit margin is calculated by dividing

		net income by stockholders' equity
		net income by net sales
		sales by cost of goods sold
		gross profit by net sales