Homework Answers
1) Solution: LIFO
Explanation: With LIFO method the latest costs are moved to cost of goods sold and then this expense is more demonstrator of current prices. These costs are high during inflation thus gives highest cost of goods sold amount.
2) Solution: LIFO
Explanation: With LIFO method the latest costs are moved to cost of goods sold and then this expense is more demonstrator of current prices. These costs are high during inflation thus the resulting gross profit and net income are lower. It helps the company to save tax dollars since payments are reduced.
3) Solution: FIFO
Explanation: Under "FIFO" method the oldest inventory items are recorded as sold first however it does not necessarily mean that the exact oldest physical goods has been sold and tracked. FIFO method is a bit closer to actual physical flow of goods as mostly the companies sell goods in order in which they are produced or purchased. During the period of steadily increasing costs, this method gives highest amount of inventory reported on the balance sheet
4) Solution: Consistency concept
Explanation: The consistency principle instructs the accountants to be consistent from one accounting period to another while the usage of accounting principles, thus applies same accounting principles as in the preceding year
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During a period of regularly rising purchase costs, the method yields the highest reported cost of...
The drop down menu option for each of these is A)LIFO B)FIFO te the sentence by...
The drop down menu option for each of these is
A)LIFO
B)FIFO
te the sentence by selecting the correct term using the drop-down list During a period of regularly rising purchase costs, the method yields the highest reported Sselect cost of goods sold amount on the income statement. During a period of regularly rising purchase costs, the method yields the lowest income tax select expense. During a period of steadily rising costs, the method results in the highest amount of...
5) Which of the following inventory costing methods yields the highest income when costs are rising...
5) Which of the following inventory costing methods yields the highest income when costs are rising during the accounting period? A) Specific-unit-cost B) Average-cost C) Last-In, First-Out D) First-In, First-Out Which of the following inventory costing methods yields the lowest income when costs are rising during the accounting period? A) Specific-unit-cost B) Average-cost C) Last-In, First-Out D) First-In, First-Out
In a period of steadily rising prices (meaning the cost to purchase inventory is increasing over time), what would be th...
In a period of steadily rising prices (meaning the cost to purchase inventory is increasing over time), what would be the implications of choosing FIFO vs. LIFO? Which method would show a higher net income, and which would show a lower net income? Which method does a better job of matching expenses and revenues? Which method reflects the most recent costs of inventory on the balance sheet? What implications might this have that would be relevant for users of the...
26. An ventory available. that yields the 21. Physical cons of inventory: 1. Are not necessary...
26. An ventory available. that yields the 21. Physical cons of inventory: 1. Are not necessary under the perpetual system. R. Are meressary to adjust the loventory account to the actual inventory Must be taken at least once a month. D. Requires the use of hand-held portable computers. Are a necessary under the cost to benefit constraint. 22. During a period of steadily rising costs, the inventory valuation method that yields lowest reported net income is: A. Specific identification method....
Financial Accounting Class Discussion In a 5 year period of rising costs which inventory method, FIFO...
Financial Accounting Class Discussion In a 5 year period of rising costs which inventory method, FIFO or LIFO will lead to the lowest cost of goods sold?
In a period of rising prices, which inventory valuation method (LIFO or FIFO) tends to result...
In a period of rising prices, which inventory valuation method (LIFO or FIFO) tends to result in the following? a. Highest cost of goods sold b. Lowest inventory valuation c. Highest income taxes
Which inventory costing method results in the lowest ending inventory during a period of rising merchandise...
Which inventory costing method results in the lowest ending inventory during a period of rising merchandise inventory cost? a.) Weighted-average b.) Specific identification c.) First-in, first-out (FIFO) d.) Last-in, first-out (LIFO)
The LIFO method of valuing inventory in an environment of rising prices and costs, generally results...
The LIFO method of valuing inventory in an environment of rising prices and costs, generally results in the following : All of the above An assumption that more recently acquired inventory is used for current production - leading to higher COGS and lower accounting profits Leads to a Balance Sheet that understates the market value of the inventory that remains Leads to a lower amount of corporate income tax being paid
During a period of decreasing inventory costs (i.e., assume a period of deflation), which inventory costing...
During a period of decreasing inventory costs (i.e., assume a period of deflation), which inventory costing method will show cost of goods sold on the income statement at the most current acquisition costs? FIFO LIFO weighted average all methods will show the same amount of cost of goods sold
Which cost flow assumption generally results in the highest reported amount of net income in periods...
Which cost flow assumption generally results in the highest reported amount of net income in periods of rising inventory costs? Multiple Choice LIFO. FIFO. Weighted-average. Income will be the same under each assumption. Which cost flow assumption must be used for financial reporting if it is also used for tax reporting? Multiple Choice LIFO. FIFO. Weighted-average. Under a perpetual inventory system: Multiple Choice Cost of good sold is recorded with a period-end adjusting entry. Purchase discounts are not recorded. Inventory...
The drop down menu option for each of these is
A)LIFO
B)FIFO
te the sentence by selecting the correct term using the drop-down list During a period of regularly rising purchase costs, the method yields the highest reported Sselect cost of goods sold amount on the income statement. During a period of regularly rising purchase costs, the method yields the lowest income tax select expense. During a period of steadily rising costs, the method results in the highest amount of...
26. An ventory available. that yields the 21. Physical cons of inventory: 1. Are not necessary under the perpetual system. R. Are meressary to adjust the loventory account to the actual inventory Must be taken at least once a month. D. Requires the use of hand-held portable computers. Are a necessary under the cost to benefit constraint. 22. During a period of steadily rising costs, the inventory valuation method that yields lowest reported net income is: A. Specific identification method....
During a period of decreasing inventory costs (i.e., assume a period of deflation), which inventory costing method will show cost of goods sold on the income statement at the most current acquisition costs? FIFO LIFO weighted average all methods will show the same amount of cost of goods sold
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