What differential impact do rising prices have on financial statements with inventory costed under LIFO compared to FIFO? a. higher ending inventory b. lower cost of goods sold c. lower gross margins d .higher net income

What differential impact do rising prices have on financial statements with inventory costed under LIFO compared to FIFO? a. higher ending inventory b. lower cost of goods sold c. lower gross margins d .higher net income

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter13: Accounting For Merchandise Inventory

Section: Chapter Questions

Problem 4MC: In rimes of rising prices, the inventory cost method that will yield the highest cost of goods sold...

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What differential impact do rising prices have on
financial statements with inventory costed under
LIFO compared to FIFO? a. higher ending inventory
b. lower cost of goods sold c. lower gross margins d
.higher net income

Definition Definition Structural system an enterprise uses to collect, store, report, retrieve, and process financial data. Accounting information systems are used by business analysts, auditors, accountants, and consultants for accurate and efficient access to financial data.

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In rimes of rising prices, the inventory cost method that will yield the highest cost of goods sold is (a) LIFO. (b) weighted-average. (c) FIFO. (d) none of the above.
When would using the FIFO inventory costing method produce higher inventory account balances than the LIFO method would? A. inflationary times B. deflationary times C. always D. never
Which accounting rule serves as the primary basis for the lower-of-cost-or-market methodology for inventory valuation? A. conservatism B. consistency C. optimism D. pessimism
Which inventory cost flow assumption generally results in the lowest reported amount for cost of goods sold when inventory costs are rising? a. Lower of cost and net realizable value. b. First-in, first-out (FIFO). c. Last-in, first-out (LIFO). d. Weighted-average cost.
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Which inventory method will result in lower net income in a period of rising prices? Which inventory method will result in lower net income in a period of falling prices?
Assuming rising inventory prices, which statement is correct? Group of answer choices A. FIFO reports a lower value for cost of sales than other methods B. FIFO reports a lower value for closing inventory than other methods C. Using FIFO, it is not possible to calculate whether cost of sales/inventory is lower or higher than it would be if other assumptions about inventory valuation were made D. FIFO reports a lower profit than other methods
1.Which of the following may not result to the amount of cost of sales? a.Net purchases less net increase in inventory b.Net decrease in inventory plus net purchases c.Total goods available for sale less beginning inventory d.Total goods available for sale less ending inventory
If merchandise inventory is being valued at cost and the purchase price is steadily falling, which method of costing will yield the largest net income? Select one: a. average cost. b. LIFO. c. FIFO. d. weighted average. e. All methods will result in the same figure of net income.
Identify that if prices are rising, which inventory cost flow method will produce the highest amount of ending inventory? A. Weighted average B. LIFO C. FIFO S. LIFO, FIFO, and weighted average will all produce the same amount of cost of goods sold.
Which of the following variations of the retail inventory method would generally result in the lowest cost-to-retail ratio in a period of rising prices? a. FIFO b. LIFO c. average cost d. lower of average cost or market