True False 1. During a period of rising costs, the LIFO cost flow assumption results in lower cost of goods sold as compared to FIFO.
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1. During a period of rising costs, the LIFO cost flow assumption results in lower cost of goods sold as compared to FIFO. |
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2. For companies using LIFO for tax purposes, the inventory method for financial statement purposes can be either FIFO or LIFO. |
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3. Under the LIFO method, the cost of goods sold balance would be the same whether a perpetual or periodic inventory system is used. |
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4. For companies using LIFO, inventory should be reported at the lower of cost or market and it may be based on the values of individual items, categories, or the total inventory. |
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5. In nonmonetary exchanges, losses are only recognized when cash is received in the transactions. |
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6. Gains are never recognized when similar assets are exchanged. |
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7. Expenditures to improve the efficiency or extend the useful life of an asset should be capitalized. |
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8. An intangible asset that is determined to have an indefinite life should be amortized over 40 years. |
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