Part One. Multiple choic items: Instruction: Escetion 1. is the item accumulated for certain purpose. A. Inventory ory B.Revenue C.Expense D. All 2. which one of the following is inventory purchased for resale? A. Supply B. Finished good C. work in process D. Merchandise 3.Which of the following is not included in valuation rule? A. Frist in First out B. Last in First out C. Promistory note D. Weight Average 4. The inventories methods in which records trarisaction continuously: C. weighted average D. all A. perpetual inventories B. periodic inventories inventories methods which records stock information usually once or twice year is? A Periodic B. perpetual C. Weighted average D. none 6.In which of the following the inventories on hand are composed of current cost? A. WA B. LIFO C.FIFO D. A and C 7. FIFO methods are applicable for: A. Drable merchandise B. perishable merchandise C Fashion model D. B and c Periodic D. WA A. FIFO B. LIFO 9.If the total sales of goods are Birr50,000 and the gross profit rate is 35% of total sales, the amount of gross profit is: A. Birr17,500 B. Bir17,800 Birt16,500 D. Birr18,500 8. Among the following, which one is included in inventory flow assumption? A. Raw material 11.Assume that the beginning investory of ABC Company is Birr.45,000 net purchase Birr37,500 and ending inventory Birr30,5 the amount of goods sold is: B. Bir55,000 C. Birr:0,000 10. Which one of the following is the type of inventory? B. Merchandise C. Supplies D. All A Birpi 82,500 12. Which of the following items is bought to use in the office? A.Supplies B.Merchandise C. Work in process D. Raw material 13. he cost of goods available for sale minus the cost of ending inventory is: A. Cost of goods available for sale cost of goods sold B. Cost of goods on hand D. Gross profit 14. Periodic inventory system only. A. A perpetual inventory system only. B. Both a periodic and perpetual inventory system. C. Neither a periodic nor perpetual inventory system. 15. The difference between ne sales and cost of merchandise sold for a merchandising business is: 16. The goods available for sale minus the cost of goods sold is: A. Cost of goods on hand C. cost of goods sold B. Cost of goods available for sale D.Gross profit 17. The cost of beginning inventory plus the cost of net purchase is: A. cost goods sold B. Cost goods available for sale C. Gross profit D All 18. 6. In which of the following the inventories on hand are composed of earliest cost? A. WA B. LIFO C.FIFO D. A and C 19. Which one of the following is included in documentation? A. Delivery reports B. Invoices from supplies C. Purchase requisition 20. which of the following is not included in inventory valuation rules? D. All A FIFO B. LIFO Part-Two: math column ''A'' to column 1. Requires a physical count of goods on hand to compute cost of goods sold. 2. Inventory system that updates Inventory balance continuously 3.Freight terms that require the buyer to pay the freight cost 4.Goods purchased for use in the office 5. Cost flow assumptions 6. Goods purchased for resale 7. Freight terms that require the seller to pay the freight/ transport cost 8. Current purchased goods are cost of goods on hand 9. Inventory tumover analysis B. A. FOB destination B. FOB shipping C. Gross profit D Selling expenses E. Income from operations F. Freight terms that require the buyer to pay the freight cost G. Perpetual inventory system H. FIFO,LIFO and weighted average 1. Merchandise inventory J. Periodic inventory K. Supply L FIFO M. Ad hoc report Part three: Answer the followings 1. Write two of estimation costs. A B

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Part One. Multiple choic items: Instruction: Escetion 1. is the item accumulated for certain purpose. A. Inventory ory B.Revenue C.Expense D. All 2. which one of the following is inventory purchased for resale? A. Supply B. Finished good C. work in process D. Merchandise 3.Which of the following is not included in valuation rule? A. Frist in First out B. Last in First out C. Promistory note D. Weight Average 4. The inventories methods in which records trarisaction continuously: C. weighted average D. all A. perpetual inventories B. periodic inventories inventories methods which records stock information usually once or twice year is? A Periodic B. perpetual C. Weighted average D. none 6.In which of the following the inventories on hand are composed of current cost? A. WA B. LIFO C.FIFO D. A and C 7. FIFO methods are applicable for: A. Drable merchandise B. perishable merchandise C Fashion model D. B and c Periodic D. WA A. FIFO B. LIFO 9.If the total sales of goods are Birr50,000 and the gross profit rate is 35% of total sales, the amount of gross profit is: A. Birr17,500 B. Bir17,800 Birt16,500 D. Birr18,500 8. Among the following, which one is included in inventory flow assumption? A. Raw material 11.Assume that the beginning investory of ABC Company is Birr.45,000 net purchase Birr37,500 and ending inventory Birr30,5 the amount of goods sold is: B. Bir55,000 C. Birr:0,000 10. Which one of the following is the type of inventory? B. Merchandise C. Supplies D. All A Birpi 82,500 12. Which of the following items is bought to use in the office? A.Supplies B.Merchandise C. Work in process D. Raw material 13. he cost of goods available for sale minus the cost of ending inventory is: A. Cost of goods available for sale cost of goods sold B. Cost of goods on hand D. Gross profit 14. Periodic inventory system only. A. A perpetual inventory system only. B. Both a periodic and perpetual inventory system. C. Neither a periodic nor perpetual inventory system. 15. The difference between ne sales and cost of merchandise sold for a merchandising business is: 16. The goods available for sale minus the cost of goods sold is: A. Cost of goods on hand C. cost of goods sold B. Cost of goods available for sale D.Gross profit 17. The cost of beginning inventory plus the cost of net purchase is: A. cost goods sold B. Cost goods available for sale C. Gross profit D All 18. 6. In which of the following the inventories on hand are composed of earliest cost? A. WA B. LIFO C.FIFO D. A and C 19. Which one of the following is included in documentation? A. Delivery reports B. Invoices from supplies C. Purchase requisition 20. which of the following is not included in inventory valuation rules? D. All A FIFO B. LIFO Part-Two: math column ''A'' to column 1. Requires a physical count of goods on hand to compute cost of goods sold. 2. Inventory system that updates Inventory balance continuously 3.Freight terms that require the buyer to pay the freight cost 4.Goods purchased for use in the office 5. Cost flow assumptions 6. Goods purchased for resale 7. Freight terms that require the seller to pay the freight/ transport cost 8. Current purchased goods are cost of goods on hand 9. Inventory tumover analysis B. A. FOB destination B. FOB shipping C. Gross profit D Selling expenses E. Income from operations F. Freight terms that require the buyer to pay the freight cost G. Perpetual inventory system H. FIFO,LIFO and weighted average 1. Merchandise inventory J. Periodic inventory K. Supply L FIFO M. Ad hoc report Part three: Answer the followings 1. Write two of estimation costs. A B

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**Part One. Multiple Choice Items:** 1. **A. Inventory** Inventory is, by definition, items accumulated for a certain purpose, such as for sale or use in production. 2. **D. Merchandise** Merchandise inventory refers to finished goods purchased by a retailer for resale. 3. **C. Promissory note** A promissory note is a financial instrument, not an inventory valuation method. FIFO, LIFO, and Weighted Average are all accepted methods. 4. **A. Perpetual inventories** A perpetual inventory system continuously updates inventory records with each purchase and sale. 5. **A. Periodic** Periodic inventory systems typically update inventory information at the end of an accounting period or less frequently. 6. **C. FIFO** Under FIFO (First-In, First-Out), the oldest costs are assumed to be sold first, leaving the most recent costs in ending inventory. 7. **D. B and C** FIFO is generally preferred for perishable goods (to minimize spoilage) and fashion items (due to rapid obsolescence). 8. **B. LIFO** LIFO (Last-In, First-Out) is an inventory flow assumption where the most recently purchased items are assumed to be sold first. 9. **A. Birr 17,500** Gross profit is calculated as Sales * Gross Profit Rate = 50,000 * 0.35 = 17,500. 10. **D. All** Raw materials, merchandise, and supplies are all types of inventory. 11. **A. Birr 52,000** Cost of Goods Sold (COGS) = Beginning Inventory + Net Purchases - Ending Inventory = 45,000 + 37,500 - 30,500 = 52,000. 12. **A. Supplies** Supplies are items used in the office, like stationery, paper clips, etc. 13. **C. Cost of goods sold** This is the fundamental formula for calculating the cost of goods sold. 14. **B. Both a periodic and perpetual inventory system.** Gross profit can be calculated under both systems. 15. **C. Gross profit** Gross profit is the difference between net sales and the cost of goods sold. 16. **A. Cost of goods on hand** This is another term for ending inventory. 17. **B. Cost of goods available for sale** This is the sum of beginning inventory and net purchases. 18. **C. FIFO** FIFO assumes the oldest costs are sold first, so the remaining inventory is valued at the most recent costs. 19. **D. All** Delivery reports, invoices, and purchase requisitions are all part of the inventory documentation process. 20. **C. Weighted Average** Weighted average *is* an inventory valuation method. **Part Two: Math Column Matching:** 1. **J. Periodic inventory** 2. **G. Perpetual inventory system** 3. **F. Freight terms that require the buyer to pay the freight cost** (This is essentially the definition of FOB shipping point) 4. **K. Supply** 5. **H. FIFO, LIFO, and weighted average** 6. **I. Merchandise inventory** 7. **A. FOB destination** 8. **L. FIFO** (In periods of rising prices, LIFO would result in the lowest cost of goods on hand, not the current cost) 9. **M. Ad hoc report** (While not directly part of the core calculation, inventory turnover is often analyzed through specific reports generated as needed.) **Part Three: Estimation Costs:** 1. **Retail Inventory Method:** This method uses the relationship between cost and retail price to estimate ending inventory. 2. **Gross Profit Method:** This method uses the historical gross profit percentage to estimate the cost of goods sold and then derives the ending inventory.

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