Question

1. The inventory cost flow assumption where the cost of the most recent purchase is matched first against sales revenue is? a) First-In, First-Out b) Last-In, First-Out c) Average Method d) Specific Identification Method 2. Which of the following does not decrease cash? a) Purchasing inventory for cash b) Accruing operating expenses c) Paying accounts payable d) Paying an instalment of a loan 3. A prepaid expense is: a) An asset b) A liability c) An expense d) None of the above 4. Which of these are not included in the accounting equation? a) Owner's equity b) Assets c) Dividends d) Liabilities 5. A revenue is: a) An increase in shareholders' equity b) A decrease in shareholders' equity c) Has no impact on shareholders' equity d) None of the above

Homework for only one choise

Answer 1

1.

Last In First Out

because cogs is calculated on the basis of latest purchases.

2.

accruing operating expenses does not affect the decrease in cash because accrued will be payable at other point of them but not the same point of occurrence.

3.

Prepaid expense will be treated as asset in the balance sheet of the financial statement.

4.

Assets = Liabilities + Equity

Dividends will be a form of equity but not to the accounting equation statement.

5.

A revenue is an increase in shareholders equity by the form of investment