Reference no: EM132917235

Questions -

Q1. The application of the "lower of cost and market value" (LCM) rules ininventories valuation. Which accounting concept governs the above?

A. The material concept

B. The accruals concept

C. The going concern concept

D. The prudence concept

Q2. An item of inventory with the original cost of RM7,250 which could be sold at RM7,300 after incurring an additional distribution cost of RM250. What is the inventory value of the item should be recorded in the inventory account?

A. RM7,250

B. RM7,500

C. RM7,050

D. RM7,550

Q3. A credit balance may appear in the sales ledger account because of___________.

A. the business has refunded an overpayment to a customer

B. a customer has overpaid the business

C. the business has overpaid a supplier

D. a supplier has given discount to the business

Q4. Which of the following statement is FALSE about control account?

A. Control accounts provide faster information regarding trade receivables and trade payables balance.

B. Control accounts assist in the location of posting errors from the books of prime entry.

C. Control accounts provide a single balance of trade receivables and trade payables in trial balance.

D. Control accounts are recorded in the Sales Ledger and Purchase Ledger.

Q5. Different methods of inventory valuation used will result in different profit figures reported. What happens during periods of inflation?

A. The first in first out (FIFO) method will usually produce highest profit.

B. The Weighted Average Cost (WAC) method will usually produce highest profit.

C. The first in first out (FIFO) method will usually produce lowest profit.

D. The Weighted Average Cost (WAC) method will usually produce lowest profit.