1. IFRS prohibits which cost flow assumption? Problem 11-25 Multiple choice (IAA) LIFO b. Specific identification Weighted average a. с. i Any of these cost flow assumptions is allowed
1. IFRS prohibits which cost flow assumption? Problem 11-25 Multiple choice (IAA) LIFO b. Specific identification Weighted average a. с. i Any of these cost flow assumptions is allowed
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:7. The cost of inventories that are not ordinarily
6. Cost of goods sold is the same under periodic system and
perpetual system using
a. FIFO
b. LIFO
c. Weighted average
d. Specific identification
interchangeable and goods produced and segregated for
specific projects shall be measured using
a. FIFO
b. Average method
c. LIFO
d. Specific identification
8. Which is the reason why the specific identification method
may be considered ideal for assigning cost to inventory and
cost of goods sold?
a. The potential for manipulation of net income is reduced.
b. There is no arbitrary allocation of cost.
c. The cost flow matches the physical flow.
d. It is applicable to all types of inventory.
9. IFRS requires the specific identification method in certain
circumstances. Which of the following is likely to be a
circumstance where the specific identification method can
be used?
a. Unit price is low.
b. Inventory turnover is low.
c. Inventory quantities are large.
d. All of the choices are likely circumstances.
10. Which cost flow assumption is used for inventory when an
entity builds townhouses?
а. FIFO
b. Specific identification
c. Weighted average
d. Any of these cost flow aesumptions
Transcribed Image Text:Problem 11-25 Multiple choice (IAA)
1. IFRS prohibits which cost flow assumption?
a. LIFO
b. Specific identification
6. Weighted average
i Any of these cost flow assumptions is allowed
с.
, What is the inventory pricing procedure in which the
oldest costs rarely have an effect on the ending
inventory?
a. FIFO
b. LIFO
c. Specific identification
d. Weighted average
3. In a period of falling prices which inventory method
generally provides the lowest amount of ending
inventory?
a. Weighted average
b. FIFO
c. Moving average
d. Specific identification
4. Which inventory cost flow assumption would consistently
result in the highest income in a period of rising prices
or inflation?
a. FIFO
b. LIFO
c. Weighted average
d. Specific identification
3. The costing of inventory must be deferred until the end
of reporting period under which of the following method of
inventory valuation?
a. Moving average
b. Weighted average
c. LIFÓ perpetual
d. FIFO perpetual
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