CGA-CANADA
FINANCIAL ACCOUNTING 1 EXAMINATION
June 2004
Marks Time: 3 Hours
9 Question 1
Select the best answer for each of the following unrelated items. Answer each of these items in your
examination booklet by giving the number of your choice. For example, if (1) is the best answer for
item (a), write (a)(1) in your examination booklet. If more than one answer is given for an item, that item
will not be marked. Incorrect answers will be marked as zero. No account will be taken of any
explanations you offer.
Note:
1
1
/2 marks each
a. Which of the following inventory costing methods gives the same ending inventory and cost of goods
sold regardless of whether a perpetual or periodic system is used?
1) Last in, first out
2) First in, first out
3) Weighted average
4) None of the methods gives the same ending inventory and cost of goods sold when using a
perpetual as compared to a periodic system.
b. The requirement to use the lower-of-cost-or-market (LCM) rule is a result of the application of which
of the following generally accepted accounting principles?
1) Matching principle
2) Conservatism principle
3) Business entity principle
4) Full-disclosure principle
c. The requirement to inform financial statement readers of the inventory costing method used is an
example of the application of which of the following generally accepted accounting principles?
1) Matching principle
2) Conservatism principle
3) Business entity principle
4) Full-disclosure principle
Continued...
EFA1J04 ©CGA-Canada, 2004 Page 1 of 8
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