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RSM220H1 Study Guide - Quiz Guide: Consignee, Current Liability, Profit Margin


Department
Rotman Commerce
Course Code
RSM220H1
Professor
Xin Baohua
Study Guide
Quiz

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1. All of the following costs should be charged to expense in the period in which they are
incurred EXCEPT for
Answer
A
.costs of normal shrinkage and scrap incurred for the manufacture of a product in
ending inventory.
B. manufacturing overhead costs for a product manufactured and sold in the same
accounting period.
C. costs from idle manufacturing capacity resulting from an unexpected plant shutdown.
D
.costs which will not benefit any future period.
2. Lower of cost and net realizable value
Answer
A
.must be applied to major categories for income tax purposes.
B. is most conservative if applied to major categories of inventory.
C. is most conservative if applied to the total inventory.
D
.is most conservative if applied to individual items of inventory.
3. Which of the following is correct?
Answer
A
.Inventory on consignment is always shown in a separate account.
B. The consignee essentially has the risks and rewards of ovwnership.
C. Goods on consignment are included in the consignee's inventory.
D
.Goods on consignment are included in the consignor's inventory.
4. Which of the following best describes the concept of product costs?
Answer
A
.They are costs that are usually expenses.
B. They usually don't include conversion costs.
C. They are costs that are "attached" to inventory.
D
.They usually don't include freight charges.
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