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During year ended 30 June 2016,Rugger Ltd had net sales of $256 000.Inventory at 1 July 2015 was $25 000,and at 30 June 2016 it was $18 000.Purchases were $115 000.What was the gross profit for year ended 30 June 2016?


A) $12 000
B) $134 000
C) $141 000
D) None of the answers provided

E) A) and D)
F) A) and C)

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A company discovered that inventory that cost $1000 and normally sells for $1200 has become obsolete and will be scrapped next month.The effect of the adjusting journal entry is to:


A) decrease profit by $1000 and decrease total assets by $1000.
B) decrease profit by $1200 and decrease total assets by $1000.
C) decrease profit by $1200 and decrease total assets by $1200.
D) decrease profit by $1000 and not affect total assets.

E) A) and C)
F) B) and C)

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Diligent Ltd had 5 units of the commodity Algo on hand at 1 September 2016.The following purchases and sales were made during September: Diligent Ltd had 5 units of the commodity Algo on hand at 1 September 2016.The following purchases and sales were made during September: - What was the value of ending inventory of Algo,using the LIFO assumption in a perpetual inventory system? A) $1460 B) $1480 C) $1580 D) $2400 - What was the value of ending inventory of Algo,using the LIFO assumption in a perpetual inventory system?


A) $1460
B) $1480
C) $1580
D) $2400

E) All of the above
F) A) and B)

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The journal entries to record a credit sale under the perpetual inventory system will include a:


A) debit to purchases.
B) credit to inventory.
C) debit to sales.
D) debit to inventory.

E) A) and D)
F) B) and D)

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At 1 July 2015,Epsilon Pty Ltd had 100 items of inventory which had cost $50 each.During the year ended 30 June 2016,it purchased 1500 items at a cost of $50 each.Of these,200 were returned to the supplier as they were damaged.During the year,1200 items were sold for $80 each,but 50 were returned by customers.Overhead expenses during the year amounted to $15 000. - What was the value of inventory in the balance sheet at 30 June 2016?


A) $22 500
B) $10 000
C) $7500
D) $12 500

E) None of the above
F) A) and C)

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The following information relates to Moderate Ltd: The following information relates to Moderate Ltd: What were the purchases for the period? A) $135 000 B) $186 000 C) $234 000 D) $240 000 What were the purchases for the period?


A) $135 000
B) $186 000
C) $234 000
D) $240 000

E) B) and C)
F) B) and D)

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A company purchases and sells Roofoo.It began last year with five units of Roofoo on hand at a cost of $10 each,and during the year its purchases and sales were as follows: A company purchases and sells Roofoo.It began last year with five units of Roofoo on hand at a cost of $10 each,and during the year its purchases and sales were as follows: - What was the value of the ending inventory of Roofoo,using the FIFO assumption? A) $30 B) $39 C) $45 D) $15 - What was the value of the ending inventory of Roofoo,using the FIFO assumption?


A) $30
B) $39
C) $45
D) $15

E) None of the above
F) A) and B)

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The entry to record a credit purchase when the perpetual method is employed is:


A) Dr Purchases \quad \quad Cr Accounts payable
B) Dr Purchases \quad \quad Cr Inventory
C) Dr Inventory \quad \quad Cr Accounts payable
D) Dr Cost of goods sold \quad Cr Accounts payable

E) B) and D)
F) B) and C)

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The perpetual accounting control method has which of the following advantages over the periodic inventory method?


A) A physical count is not required.
B) Stock shortages are eliminated.
C) Cost of operation is lower.
D) Details of the number of items on hand is available.

E) A) and B)
F) A) and C)

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Which of the following statements about the perpetual inventory control method is NOT true?


A) When a sale is made,cost of goods sold is increased.
B) When inventory is purchased,it is treated as an expense.
C) A separate record is kept for each item of inventory.
D) An inventory count can reveal inventory losses.

E) B) and D)
F) B) and C)

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Which of the following statements about the last-in,first-out (LIFO) assumption is true?


A) LIFO assumes that inventory on hand consists of the oldest units.
B) LIFO results in newer costs appearing in the balance sheet.
C) LIFO assumes the items sold are those purchased first.
D) None of the answers provided.

E) B) and C)
F) B) and D)

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Diligent Ltd had 5 units of the commodity Algo on hand at 1 September 2016.The following purchases and sales were made during September: Diligent Ltd had 5 units of the commodity Algo on hand at 1 September 2016.The following purchases and sales were made during September: -What was the value of cost of goods sold of Algo,using the moving weighted average assumption and a perpetual inventory system? A) $2640 B) $2700 C) $2720 D) $3180 -What was the value of cost of goods sold of Algo,using the moving weighted average assumption and a perpetual inventory system?


A) $2640
B) $2700
C) $2720
D) $3180

E) None of the above
F) A) and D)

Correct Answer

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In a period of rising purchase prices,which cost flow assumption provides the highest net profit?


A) FIFO
B) Moving weighted average
C) LIFO
D) All three give the same net profit

E) B) and C)
F) A) and B)

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Which of the following statements about the use of the LIFO method in Australia is true?


A) The LIFO method is not allowed to be used for either financial reporting or tax purposes.
B) The LIFO method may be used for both financial reporting and tax purposes.
C) The LIFO method may be used for financial reporting but not for tax purposes.
D) The LIFO method can only be used if approval is received from the Australian Taxation Office.

E) A) and B)
F) A) and C)

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A company purchases and sells Roofoo.It began last year with five units of Roofoo on hand at a cost of $10 each,and during the year its purchases and sales were as follows: A company purchases and sells Roofoo.It began last year with five units of Roofoo on hand at a cost of $10 each,and during the year its purchases and sales were as follows: -What was the value of ending inventory of Roofoo,using the LIFO assumption in a periodic inventory system? A) $30. B) $36.43. C) $45. D) $109.26. -What was the value of ending inventory of Roofoo,using the LIFO assumption in a periodic inventory system?


A) $30.
B) $36.43.
C) $45.
D) $109.26.

E) B) and C)
F) A) and B)

Correct Answer

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Which of the following entries records a credit sale under the perpetual inventory system?


A) Dr Cost of goods sold
B) Dr Sales
C) Dr Inventory
D) Dr Accounts receivable

E) A) and D)
F) None of the above

Correct Answer

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Which of the following statements about the use of the weighted average assumption is true?


A) The balance sheet figure is between the LIFO and FIFO figures.
B) When prices are rising,it shows lower balance sheet figures than the LIFO method.
C) When prices are falling,it shows lower balance sheet figures than the FIFO method.
D) None of the answers provided.

E) A) and B)
F) None of the above

Correct Answer

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The following details relate to a perpetual inventory system: The following details relate to a perpetual inventory system: What was the value of opening inventory? A) $204 000 B) $306 000 C) $459 000 D) $561 000 What was the value of opening inventory?


A) $204 000
B) $306 000
C) $459 000
D) $561 000

E) A) and B)
F) B) and C)

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The following lots of a particular commodity were available for sale during the year: The following lots of a particular commodity were available for sale during the year: The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year.What is the amount of inventory at the end of the year,according to the first-in,first-out method? A) $1200 B) $1230 C) $1370 D) $1400 The firm uses the periodic system and there are 20 units of the commodity on hand at the end of the year.What is the amount of inventory at the end of the year,according to the first-in,first-out method?


A) $1200
B) $1230
C) $1370
D) $1400

E) A) and B)
F) All of the above

Correct Answer

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The entry to record a credit purchase when the periodic inventory method is employed will include a:


A) debit to inventory.
B) credit to purchases.
C) debit to purchases.
D) debit to cost of goods sold.

E) A) and B)
F) B) and D)

Correct Answer

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