Question

Which of the following statement is true regarding inventory costing? Select one: O A. Under FIFO, the first units purchased are sold and ending inventory is made up of the most recent purchase O B. The cost of ending inventory is the same Under the LIFO and FIFO methods. O C. Both statements are true O D. None of the above statements are true Petty Cash is reserved for large purchases or repairs such as the replacement of a truck transmission. Select one: True False

Answer 1

Part 1)

The correct answer is

a) Under FIFO, first units purchased are sold and ending inventory is made up of the most recent purchase.

Explanation

Only the above mentioned statements is correct as in FIFO first in goods sold are sold first and ending inventory consist of latest purchases. More over other like ending inventory of FIFO and LIFO are not same.

Part 2)

The correct answer is

False

Explanation

Petty cash is reserved for day to day small expenses, not for big capital expenditures. So the given statement is incorrect.