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.
Homework Answers
1)) In periods when costs are rising, LIFO liquidations:--
D. Distort the net income.
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In periods when costs are rising, LIFO liquidations:
A. Can’t occur.
B. Are used to reduce...
in periods when cost are rising, LIFO liquidations: 1. can't occur 2. are used to reduce...
in periods when cost are rising, LIFO liquidations: 1. can't occur 2. are used to reduce tax liabilities 3. are a source of off-balancing-sheet financing 4. distort the net income
Which one of the following is an advantage of LIFO? In periods of rising prices, more...
Which one of the following is an advantage of LIFO? In periods of rising prices, more holding gains are reported in net income. In periods of rising prices, less income tax is paid. Record keeping and financial statement preparation are easier. Conservative income statements and balance sheet disclosures result from falling prices.
AP7-3) Page 1864 P7-5 Evaluating the LIFO and FIFO Choice When Costs Are Rising and Falling...
AP7-3) Page 1864 P7-5 Evaluating the LIFO and FIFO Choice When Costs Are Rising and Falling L07-2,7-3 Income is to be evaluated under four different situations as follows: a. Prices are rising: (1) Situation A: FIFO is used. (2) Situation B: LIFO is used. b. Prices are falling: (1) Situation C: FIFO is used. (2) Situation D: LIFO is used. The basic data common to all four situations are sales, 500 units for $15,000: beginning inventory, 300 units purchases. 400...
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
It is argued that LIFO should not be allowed to compute net income because a. b....
It is argued that LIFO should not be allowed to compute net income because a. b. C. it does not match costs to revenues, especially when there is inflation in the economy. it overstates balance sheet inventory. it understates cost of goods sold when prices are rising and therefore makes US companies' results look better than foreign companies' results which can only use FIFO. it causes profits to be understated when prices are rising and allows a company to dodge...
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...
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....
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...
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...
25. When usinga perpetual inventory system, A) no Purchases account is used. B) a Cost of...
25. When usinga 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. 26. Which of the following is a product cost as it relates to inventory? A) Selling costs. B) Interest costs. C) Raw materials D) Abnormal spoilage 27. An inventory pricing procedure in which the oldest costs incurred rarely have an effect on...
Which one of the following is an advantage of LIFO? In periods of rising prices, more holding gains are reported in net income. In periods of rising prices, less income tax is paid. Record keeping and financial statement preparation are easier. Conservative income statements and balance sheet disclosures result from falling prices.
AP7-3) Page 1864 P7-5 Evaluating the LIFO and FIFO Choice When Costs Are Rising and Falling L07-2,7-3 Income is to be evaluated under four different situations as follows: a. Prices are rising: (1) Situation A: FIFO is used. (2) Situation B: LIFO is used. b. Prices are falling: (1) Situation C: FIFO is used. (2) Situation D: LIFO is used. The basic data common to all four situations are sales, 500 units for $15,000: beginning inventory, 300 units purchases. 400...
It is argued that LIFO should not be allowed to compute net income because a. b. C. it does not match costs to revenues, especially when there is inflation in the economy. it overstates balance sheet inventory. it understates cost of goods sold when prices are rising and therefore makes US companies' results look better than foreign companies' results which can only use FIFO. it causes profits to be understated when prices are rising and allows a company to dodge...
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...
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....
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...
25. When usinga 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. 26. Which of the following is a product cost as it relates to inventory? A) Selling costs. B) Interest costs. C) Raw materials D) Abnormal spoilage 27. An inventory pricing procedure in which the oldest costs incurred rarely have an effect on...
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