46. In periods of rising prices, LIFO will produce: a. higher net income than FIFO. b. the same net income as FIFO. c. lower net income than FIFO. d. higher net income than average costing.
46. In periods of rising prices, LIFO will produce: a. higher net income than FIFO. b. the same net income as FIFO. c. lower net income than FIFO. d. higher net income than average costing.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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I Only Want The Correct Option in these MCQs can u please help me
Transcribed Image Text:46. In periods of rising prices, LIFO will produce:
a. higher net income than FIFO.
b. the same net income as FIFO.
c. lower net income than FIFO.
d. higher net income than average costing.
47. Factors that affect the selection of an inventory costing method do not include:
a. tax effects.
b. balance sheet effects.
c. income statement effects.
d. perpetual vs. periodic inventory system.
48. Rickety Company purchased 1,000 widgets and has 200 widgets in its ending inventory at a
cost of $91 each and a current replacement cost of $80 each. The ending inventory under lower-
of-cost-or-market is:
a. $91,000
b. $80,000
c. $18,200
d. $16,000
49. Which is an error of omission?
a. No entries have been made for the purchase of stationery by cheque.
b. Purchase of stationery has been entered only in the cash book.
c. Purchase of stationery has been entered only in the stationery account.
d. The stationery account has been omitted from the trial balance.
50. Liam rents premises from Gavin. In March Liam paid the rent in advance for April and May.
How would the balance on 1 April appear in their ledgers?
Liam's ledger
rent payable account
Gavin's ledger
rent receivable account
A
as a credit balance
as a credit balance
as a credit balance
as a debit balance
as a debit balance
as a credit balance
D
as a debit balance
as a debit balance
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Transcribed Image Text:51. Harold Company overstated its inventory by $15,000 at December 31, 2011. It did not
correct the error in 2011 or 2012. As a result, Harold's owner's equity was:
a. overstated at December 31, 2011, and understated at December 31, 2012.
b. overstated at December 31, 2011, and properly stated at December 31, 2012.
c. understated at December 31, 2011, and understated at December 31, 2012.
d. overstated at December 31, 2011, and overstated at December 31, 2012.
52. Songbird Company has sales of $150,000 and cost of goods available for sale of $135,000. If
the gross profit rate is 30%, the estimated cost of the ending inventory under the gross profit
method is:
a. $15,000
b. $30,000
c. $45,000
d. $75,000.
53. In a bank reconciliation, deposits in transit are:
a. deducted from the book balance.
b. added to the book balance.
c. added to the bank balance.
d. deducted from the bank balance
54. The reconciling item in a bank reconciliation that will result in an adjusting entry by the
depositor is:
a. outstanding checks
b. deposit in transit.
c. a bank error.
d. bank service charges
55. Which of the following statements correctly describes the reporting of cash?
a. Cash cannot be combined with cash equivalents.
b. Restricted cash funds may be combined with Cash.
c. Cash is listed first in the current assets section.
d. Restricted cash funds cannot be reported as a current asset.
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