CHAPTER 5 NAME ___________________________________
TEN-MINUTE QUIZ SECTION _____________ DATE____________
_____________________________________________________________________________
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_____ 1. Merchandise inventory is classified as a:
a. Long-term asset
b. Current liability
c. Current asset
d. Revenue
_____ 2. Discount terms of 1/10, n/45 mean:
a. 10% discount if paid within 45 days
b. 1% discount if paid within 10 days
c. 1% discount if paid within 45 days
d. No discount is allowed
_____ 3. Net purchases consists of:
a. Purchase discounts
b. Gross purchases
c. Purchase returns and allowances
d. All of the above
_____ 4. Which of the following inventory methods uses the cost of the oldest goods on
hand to calculate cost of goods sold?
a. Last-in, first-out (LIFO)
b. First-in, first-out (FIFO)
c. Weighted average
d. Specific identification
_____ 5. Which of the following inventory methods uses the cost of the newest goods on
hand to calculate cost of goods sold?
a. Last-in, first-out (LIFO)
b. First-in, first-out (FIFO)
c. Weighted average
d. Specific identification
_____ 6. Which of the following inventory systems requires that cost of goods sold is
calculated at the time of each sale?
a. Periodic
b. Weighted average
c. Perpetual
d. All of the above
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-1
Use the following data for questions 7-9:
Clayton Enterprises reported the following for the month of March:
Beginning inventory 100 @ $5
Purchase 3/15 80 @ $6
Purchase 3/22 70 @ $7
Sales 200 @ $18
_____ 7. What is the balance of ending inventory under FIFO?
a. $250
b. $300
c. $350
d. None of the above
_____ 8. What is the balance of ending inventory under LIFO?
a. $250
b. $300
c. $350
d. None of the above
_____ 9. What is the balance of ending inventory under weighted-average cost?
a. $294
b. $300
c. $326
d. None of the above
_____ 10. The inventory turnover ratio is calculated as:
a. Gross margin divided by sales
b. Gross margin divided by average inventory
c. Cost of goods sold divided by average inventory
d. Cost of goods sold divided by sales
ANSWER KEY – CHAPTER 5 – TEN-MINUTE QUIZ
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-2
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 5-3