Homework Answers
b Last in, First out (LIFO). since Under LIFO method we assume that Inventory purchased last is sold first. So inventory purchased last would have higher cost which means higher COGS. Higher COGS means lower income. Also ending inventory would contain units purchased in beginning. Thus lower ending inventory.
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5. In a period of rising prices, which inventory valuation method would generally yield both the...
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)
When inventory prices are increasing, which inventory valuation method would give you the lowest cost of...
When inventory prices are increasing, which inventory valuation method would give you the lowest cost of goods sold? B. FIFO LIFO Weighted Average Specific Identification D. The net method of recording sales violates the: A. Matching Principle Cost Principle Revenue Principle De here] D. None of the Above The formula for calculating the COGS when using the periodic inventory system is COGS=COST-SALVAGE VALUE/LIFE COGS=SALES LESS EXPENSES COGS=BI+NP-EI COGSEBEGING INVENTORY-ENDING INVENTORY-GAFS D.
In a period of rising costs, which inventory valuation method would a company likely choose if...
In a period of rising costs, which inventory valuation method would a company likely choose if they want to have the highest possible balance of inventory on the balance sheet? Weighted-average cost. B) FIFO. C) LIFO. D) Periodic. Which of the following is a negative sign that a company is not selling its inventory quickly? A high inventory turnover ratio. Both a high inventory turnover ratio and a low average days in inventory. A low average days in inventory. A...
31. When using a perpetual inventory system, a. no Purchases account is used. b. a Cost...
31. When using a perpetual inventory system, a. no Purchases account is used. b. a Cost of Goods Sold account is used. c. two entries are required to record a sale. d) All of these answer choices are correct sold for 2017, net income for 2017, and assets at December 31, 2018, respectively, are a. overstatement, understatement, overstatement. 32. If the beginning inventory for 2017 is overstated, the effects of this error on cost of goods overstatement, understatement, no effect....
The Walking Dead Company is using LIFO inventory method. With rising prices, they make a large...
The Walking Dead Company is using LIFO inventory method. With rising prices, they make a large inventory purchase on December 31st. This purchase will : become part of ending inventory become part of cost of goods sold be evenly divided between cost of goods sold and ending inventory increase reported income The Dog Company uses first in first out inventory (FIFO). If Dog makes a large inventory purchase on December 31st this will : Increase cost of goods sold Increase...
If inventory is being valued at cost and the price level is steadily rising, which of...
If inventory is being valued at cost and the price level is steadily rising, which of the following three methods of costing—FIFO, LIFO, or weighted average cost—will yield the lowest annual after tax net income? Which method will yield the highest after tax net income in a scenario where the price level is steadily declining? Which of the three methods of inventory will in general yield an inventory cost most nearly approximating current replacement cost?
If prices are rising, which inventory cost flow method will produce the lowest amount of cost...
If prices are rising, which inventory cost flow method will produce the lowest amount of cost of goods sold? FIFO Weighted average LIFO LIFO, FIFO, and the weighted-average inventory cost flow methods will all produce equal amounts of cost of goods sold. 1 points QUESTION 7 West Corporation's Year 1 ending inventory was overstated by $20,000; however, ending inventory for Year 2 was correct. Which of the following statements is correct? Cost of goods sold for Year 1 is...
Required: Choose the method of inventory valuation that corresponds to each of the statements that follow:...
Required: Choose the method of inventory valuation that corresponds to each of the statements that follow: 1. FIFO 2. LIFO 3. Weighted average. 4. Specific identification Matches actual flow of goods with actual flow of costs in most cases Matches old costs with new sales prices Results in the lowest net income in periods of falling prices Matches recent costs with new sales prices Does not assume any particular flow of goods Best suited for situations in which inventory consists...
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...
When inventory prices are increasing, which inventory valuation method would give you the lowest cost of goods sold? B. FIFO LIFO Weighted Average Specific Identification D. The net method of recording sales violates the: A. Matching Principle Cost Principle Revenue Principle De here] D. None of the Above The formula for calculating the COGS when using the periodic inventory system is COGS=COST-SALVAGE VALUE/LIFE COGS=SALES LESS EXPENSES COGS=BI+NP-EI COGSEBEGING INVENTORY-ENDING INVENTORY-GAFS D.
31. When using a perpetual inventory system, a. no Purchases account is used. b. a Cost of Goods Sold account is used. c. two entries are required to record a sale. d) All of these answer choices are correct sold for 2017, net income for 2017, and assets at December 31, 2018, respectively, are a. overstatement, understatement, overstatement. 32. If the beginning inventory for 2017 is overstated, the effects of this error on cost of goods overstatement, understatement, no effect....
Required: Choose the method of inventory valuation that corresponds to each of the statements that follow: 1. FIFO 2. LIFO 3. Weighted average. 4. Specific identification Matches actual flow of goods with actual flow of costs in most cases Matches old costs with new sales prices Results in the lowest net income in periods of falling prices Matches recent costs with new sales prices Does not assume any particular flow of goods Best suited for situations in which inventory consists...
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