Question

1. FIFO tends to increase cost of goods sold​ when: A. costs are constant B. costs...

1. FIFO tends to increase cost of goods sold​ when:

A. costs are constant

B. costs are declining

C. costs are increasing

D. FIFO will always yield the lowest possible cost of goods sold

2. Which of the following would be included in the Inventory account on a merchandising​ company's balance​ sheet?

A. shipping costs from the manufacturer to the merchandising company

B. sales commissions

C. delivery costs

D. advertising costs

3. If ending inventory on December​ 31, 2016, is​ overstated, then:

A. gross margin for the year ended December​ 31, 2016, will be understated

B. gross margin for the year ended December​ 31, 2017, will be understated

C. cost of goods sold for the year ended December​ 31, 2017, will be understated

D. cost of goods sold for the year ended December​ 31, 2016, will be overstated

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Answer #1

1.

FIFO tends to increase cost of goods sold​ when  costs are declining.

Correct option is (B)

2.

Shipping costs from the manufacturer to the merchandising company would be included in the Inventory account on a merchandising​ company's balance​ sheet.

Correct option is (A)

3.

If ending inventory on December​ 31, 2016, is​ overstated, then cost of goods sold for the year ended December​ 31, 2017, will be understated

Correct option is (C)

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