Mark each of the following statements as either True or False and select the correct answer. _ In periods of declining prices, periodic FIFO will have a lower net income than periodic LIFO. eriod. FO. Using the LIFO inventory method eliminates the need for a physical inventory count at the end of the accounting In periods of rising prices, periodic LIFO will have a higher amount of ending inventory compared to periodic

Mark each of the following statements as either True or False and select the correct answer. _ In periods of declining prices, periodic FIFO will have a lower net income than periodic LIFO. eriod. FO. Using the LIFO inventory method eliminates the need for a physical inventory count at the end of the accounting In periods of rising prices, periodic LIFO will have a higher amount of ending inventory compared to periodic

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Description: • Mark each of the following statements as either True or False and select the correct answer.period.FIFO.In periods of declining prices, periodic FIFO will have a lower net income than periodic LIFO.Using the LIFO inventory method eliminates the ne

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter9: Working Capital

Section: Chapter Questions

Problem 7Q

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In rimes of rising prices, the inventory cost method that will yield the highest cost of goods sold is (a) LIFO. (b) weighted-average. (c) FIFO. (d) none of the above.
During a period of rising inventory prices the LIFO cost flow method will result in higher total assets than FIFO. True or False True False
The answer is d, ex In a period of rising prices, the inventory method which tends to report the lowest inventory is a. FIFO. b. LISH. c. Specific identification. d. Average - cost.
Choose the statement which is correct. Assume that inventory prices are rising. Select one: a. The FIFO method gives the lowest closing inventory figure in the balance sheet. b. The FIFO method gives the highest closing inventory figure in the balance sheet. c. The LIFO method gives the lowest figure for cost of sales. d. The LIFO method gives the highest closing inventory figure in the balance sheet. e. None of the above answers is correct.
In a period of rising prices, the inventory method which tends to give the highest reported inventory is A) FIFO B) Moving Average C) LIFO D) Weighted-average
Overstating ending inventory in the current year causes net income in the current year to be overstated. Select one: True False Using the weighted-average cost method, the average cost of inventory is calculated as the average unit cost of inventory purchased during the year. Select one: O True O False During periods of rising costs, FIFO generally results in a higher cost of goods sold. Select one: O True False During periods of rising costs, LIFO generally results in a higher ending inventory balance. Select one: O True O False
Match the inventory method with its related characteristic. Assume a period of rising prices in all cases. 1. LIFO 2. FIFO 3. Weighted Average 4. Specific Identification Will result in reporting the highest net [Choose ] income Will result in showing the highest [Choose] reported inventory Tends to smooth out the effects of [Choose] inflation Will result in reporting the highest Cost of Goods Sold [Choose] Used where it is practical to physically separate the different purchases made [Choose] 6. Will result in matching current costs [Choose]
Which one of the following statements is true? a. Under conditions of rising prices, the LIFO method results in lower income than the FIFO method. b. In most cases, the LIFO method approximates the physical flow of items in inventory. c. The LIFO mthod produces a higher ending inventory value than the FIFO method. d. The FIFO method excludes holding gains from income
In a period of rising prices, the inventory cost allocation method that tends to result in the highest reported net income is a. LIFOb. FIFOc. Moving Averaged. Weighted Average
Which of the following statements is correct? Group of answer choices A)The choice of an inventory costing method is dependent upon the actual physical flow of the inventory. B)LIFO should be used during a period of increasing prices when the objective is to maximize the ending inventory value on the balance sheet. C)FIFO should be used during a period of decreasing prices when the objective is to maximize the gross profit reported on the balance sheet. D)The average cost method will result in an ending inventory balance which is somewhere between LIFO and FIFO when inventory prices are changing.
Compare the financial effects (ignore income tax) of using the FIFO and average inventory cost formulas during a period of declining prices on the following items: (a) (b) (c) (d) (e) Cash (pre-tax), Ending inventory Cost of goods sold Net income Retained earnings FIFO method Lower Higher No effect Average inventory cost method >
Identify that if prices are rising, which inventory cost flow method will produce the highest amount of ending inventory? A. Weighted average B. LIFO C. FIFO S. LIFO, FIFO, and weighted average will all produce the same amount of cost of goods sold.