Homework Answers
Answer : In periods of rising prices, less income tax is paid.
>> LIFO Method means Last in first out i.e latest purchase is sold first.
>> In rising price closing inventory is show low value, so income will be less and income tax also decreases.
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Which one of the following is an advantage of LIFO? In periods of rising prices, more...
In periods when costs are rising, LIFO liquidations: A. Can’t occur. B. Are used to reduce...
In periods when costs are rising, LIFO liquidations: A. Can’t occur. B. Are used to reduce tax liabilities. C. Are a source of off-balance-sheet financing. D. Distort the net income.
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
In periods with rising prices and increasing quantities of inventories, which of the following relationships among...
In periods with rising prices and increasing quantities of inventories, which of the following relationships among inventory valuation methods is generally correct? O FIFO has a higher inventory balance and a lower net income than LIFO. O FIFO has a higher inventory balance and a higher net income than LIFO. OLIFO has a higher inventory balance and a higher net income than FIFO. OLIFO has a higher inventory balance and a lower net income than FIFO. All of the following...
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...
During a period of regularly rising purchase costs, the method yields the highest reported cost of...
During a period of regularly rising purchase costs, the method yields the highest reported cost of goods sold amount on the income statement. During a period of regularly rising purchase costs, the method yields the lowest income tax expense. select During a period of steadily rising costs, the method results in the highest amount of inventory reported on the balance sheet. The prescribes that a company use the same accounting methods period after period so that financial statements are comparable...
QUESTION 4 8 points Save Answer Company A uses LIFO and Company B uses FIFO. Assume rising prices. In analyzing li...
QUESTION 4 8 points Save Answer Company A uses LIFO and Company B uses FIFO. Assume rising prices. In analyzing liquidity and profitability of the two firms, which of the following statements is true? Company B will have higher owners' equity. Company A will have lower cost of goods sold Company A will have higher liabilities. Company B will have lower income tax payments. It is impossible to say anything about the two firms since they use different inventory methods....
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...
Exam 15.1n a period of rising prices, FIFO will have aower ne income than LIFO lower...
Exam 15.1n a period of rising prices, FIFO will have aower ne income than LIFO lower cost of goods sold than LIFO lower inoome tax expense than LIFO. dlower net purchases than LIFO 16 The inventory tumover is computed by dividing cost of goods sold by a beginning inventory. b ending inventory average inventory. a 365 days. 17. Barley Company developed the following information about its inentories in applying the lower-of-cost-or-et realizable value (LCNRV) basis in valuing inventories Product Net...
Which of the following is a normative economic statement? With falling home prices and rising mortgage...
Which of the following is a normative economic statement? With falling home prices and rising mortgage interest rates, the amount of foreclosures has increased. B) The federal government is considering raising the gasoline tax to promote the use of public transportation. c) Fashion designers should be allowed to copyright designs to promote innovation. D) Rising global demand for diesel and heating oil has led to increases in the price of crude oil. Question 15 (10 points) The economic analysis of...
QUESTION 16 16. What happens when prices are rising? A. LIFO will result in lower net...
QUESTION 16 16. What happens when prices are rising? A. LIFO will result in lower net income and a lower inventory valuation than will FIFO. B.LIFO will result in lower net income and a higher inventory valuation than will FIFO. C. LIFO will result in higher net income and a higher inventory valuation than will FIFO. D. LIFO will result in higher net income and a lower inventory valuation than will FIFO. QUESTION 17 Rowan Company has four different categories...
In periods with rising prices and increasing quantities of inventories, which of the following relationships among inventory valuation methods is generally correct? O FIFO has a higher inventory balance and a lower net income than LIFO. O FIFO has a higher inventory balance and a higher net income than LIFO. OLIFO has a higher inventory balance and a higher net income than FIFO. OLIFO has a higher inventory balance and a lower net income than FIFO. All of the following...
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...
During a period of regularly rising purchase costs, the method yields the highest reported cost of goods sold amount on the income statement. During a period of regularly rising purchase costs, the method yields the lowest income tax expense. select During a period of steadily rising costs, the method results in the highest amount of inventory reported on the balance sheet. The prescribes that a company use the same accounting methods period after period so that financial statements are comparable...
QUESTION 4 8 points Save Answer Company A uses LIFO and Company B uses FIFO. Assume rising prices. In analyzing liquidity and profitability of the two firms, which of the following statements is true? Company B will have higher owners' equity. Company A will have lower cost of goods sold Company A will have higher liabilities. Company B will have lower income tax payments. It is impossible to say anything about the two firms since they use different inventory methods....
Exam 15.1n a period of rising prices, FIFO will have aower ne income than LIFO lower cost of goods sold than LIFO lower inoome tax expense than LIFO. dlower net purchases than LIFO 16 The inventory tumover is computed by dividing cost of goods sold by a beginning inventory. b ending inventory average inventory. a 365 days. 17. Barley Company developed the following information about its inentories in applying the lower-of-cost-or-et realizable value (LCNRV) basis in valuing inventories Product Net...
Which of the following is a normative economic statement? With falling home prices and rising mortgage interest rates, the amount of foreclosures has increased. B) The federal government is considering raising the gasoline tax to promote the use of public transportation. c) Fashion designers should be allowed to copyright designs to promote innovation. D) Rising global demand for diesel and heating oil has led to increases in the price of crude oil. Question 15 (10 points) The economic analysis of...
QUESTION 16 16. What happens when prices are rising? A. LIFO will result in lower net income and a lower inventory valuation than will FIFO. B.LIFO will result in lower net income and a higher inventory valuation than will FIFO. C. LIFO will result in higher net income and a higher inventory valuation than will FIFO. D. LIFO will result in higher net income and a lower inventory valuation than will FIFO. QUESTION 17 Rowan Company has four different categories...
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