Companies record their cost of goods sold in different ways, depending on whether the goods they sell are unique or fungible (that's business-speak for 'indistinguishable from each other').

So how do you tell a unique good from a fungible good? Don't worry: you can sharpen your skills of discernment with the following practice questions.

Practice questions

  1. Which of the following is a fungible good?

    A. Corn

    B. Original oil paintings

    C. Designer jewelry pieces

    D. New cars

    E. Native American hand-woven tapestries

  2. Name three fungible goods.

    A. 400 gallons of water to be sold to different customers, 400 gallons of special mix paint to be sold to one customer, 400 gallons of sweet crude oil

    B. 2,000 bushels of corn, 2,000 bushels of tomatoes, 2,000 bushels of soybeans

    C. A painting by Norman Rockwell, a painting by Grandma Moses, a painting by Claude Monet

    D. A new convertible, a new truck, a new minivan

    E. A diamond ring, an emerald ring, a sapphire ring

Answers and explanations

  1. The correct answer choice is A.

    Fungible goods are indistinguishable from one another. Kernels of corn are identical. Artwork, such as original oil paintings, hand-woven tapestries, or designer jewelry, is unique and therefore not fungible. New cars are also unique and are identified by an identification number.

  2. The correct answer choice is B.

    Corn, tomatoes, and soybeans are all fungible goods. Each item is not uniquely identifiable.

If you need more practice on this and other topics from your accounting course, visit to purchase Accounting For Dummies! Featuring the latest information on accounting methods and standards, the information in Accounting For Dummies is valuable for anyone studying or working in the fields of accounting or finance.

About This Article

This article is from the book:

About the book authors:

Kenneth Boyd is the owner of St. Louis Test Preparation ( He provides online tutoring in accounting and finance. Kenneth has worked as a CPA, Auditor, Tax Preparer, and College Professor. He is the author of CPA Exam For Dummies. Kate Mooney has been teaching accounting to both undergraduates and MBA students at St. Cloud State University since 1986, after earning her PhD from Texas A & M University. She is a licensed CPA in Minnesota and is a member of the State Board of Accountancy.

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