Question

O AutoSave OCH H File Home Insert Design second exam. Layout References Mailings Zakari, Salu Review View 2 - Help Grammarly 26) 26) Which of the following inventory costing methods yields the highest net income during a period of rising inventory costs? A) last-in, first-out B) first-in, first-out C) weighted average D) specific identification 27) - 27) Which of the following inventory costing methods yields the lowest net income during a period of rising inventory costs? A) specific identification B) last-in, first-out C) first-in, first-out D) weighted average 28) 28) Which of the following inventory valuation methods minimizes income tax expense during a period of rising inventory costs? A) weighted average B) specific identification C) last-in, first-out D) first-in, first-out 29) . GAAPZ 29) Which of the following values is considered the market value when valuing inventory at lower of-cost-or-market under U.S. GAAP? A) current replacement cost B) sales price less the company's normal mark-up percentage c) historic cost D) cost plus the company's normal mark-up percentage 30) 30) Which of the following amounts would be reported as Merchandise Inventory on the balance sheet of a company if the cost of an item is $120 and the current replacement cost is 580? A) 5120 B) $200 C) The average of $80 and $120 D) $50 31) 31) When a company uses the perpetual inventory method, which of the following would be the entry to adjust inventory to lower-of-cost or market? Page 4 of 8 2465 words D English (United States) D) Focus Lo- 100 11:37 AM Q WENG 11/1/2019 hp

Answer 1

26) Answer is Option b.

FIFO method yields the highest net income during a period of risking inventory costs.

27) Answer is Option b.

LIFO method yields the lowest net income during a period of risking inventory costs.

28) Answer is Option c.

LIFO method minimises income tax expense during a period of risking inventory costs.

29) Answer is Option a.

Current replacement cost is considered when valuing inventory under US GAAP.

30) Answer is Option d.

Current replacement cost is considered as merchandise inventory on the balance sheet of a company.

So $ 80 will be reflected in balance sheet.

Thank you.