Knowledge Check Question 3: When inventory prices are falling, using the LIFO costing method will generally result in a: A. Lower ending inventory value than under FIFO B. Lower income tax expense than under FIFO C. Lower cost of goods sold than under FIFO D. Lower net income than under FIFO

Q: Ace Company is a retailer operating in an industry that experiences inflation (rising prices). Ace…

A: Companies using FIFO method for inventory valuation , reports higher inventory which generally leads…

Q: 1.  The lower-of-cost-or-market method can be applied to each item of inventory. each major class…

A: In case of multiple questions, we are allowed to solve only the first question. In case if you want…

Q: Assume that a firm separately determined inventory under FIFO and LIFO and then compared the…

A: FIFO (First in first out) method is an accounting method in which inventory purchased first should…

Q: When net realizable value is lower than cost, and the loss method applying the…

A: As per Accounting Standards on Inventory valuation, each item of inventory is calculated at cost or…

Q: 5. If a unit of inventory has declined in value below original cost, but the market value exceeds…

A: The procedure of determining the actual value of inventories at the end of the year is known as…

Q: When would using the FIFO inventory costing method produce higher inventory account balancesthan the…

A: Inventory is one of the important asset for the business. Valuation and management of inventory is…

Q: 22.Which inventory costing method has a stabilizing effect on profit, such that during a period of…

A: There are four Methods of issue of material  1.First-in, first-out method 2.  Last-in, first-out…

Q: The inventory valuation method that has the advantages of assigning an amount to inventory on the…

A: Inventory means the stock of goods in hand . Goods means the thing in which the business deals and…

Q: When inventory unit costs are increasing: Group of answer choices a)FIFO will result in higher…

A: FIFO refers to the method of inventory costing where items purchased first are sold first.

Q: 2 Calculate ending inventory using the lower of cost and net realizable value.

A: The Inventory is  recorded at cost or NRV in the financial position so that inventory is valued…

Q: Which inventory cost flow assumption generally results in the lowest reported amount for cost of…

A: The answer will be FIFO, First-in, first-out i.e. option B.

Q: Choose the statement which is correct. Assume that inventory prices are rising. Select one: a. The…

A: LIFO means last in first out where as FIFO means first in first out. Inventory and cost of goods…

Q: Lower-of-Cost-or-Market Method On the basis of the data shown below:   Item Inventory Quantity…

A: Lower-of-cost-or-market: The lower-of-cost-or-market (LCM) is a method which requires the reporting…

Q: In times of decreasing prices, LIFO will result in ____ costs of goods sold and _____ ending…

A: FIFO: FIFO stands for First-In, First-Out.  In this method inventory purchased first will be sell…

Q: Evaluate different types of risk and costs if the financial director proposed to reduce inventory.…

A: The current ratio is computed by dividing current assets by current liabilities. The acid test ratio…

Q: For each item below, indicate whether FIFO or LIFO will generally result in a higher reported amount…

A: Last-in-First-Out (LIFO): In this method, items purchased recently are sold first. So, the value of…

Q: True False 1. During a period of rising costs, the LIFO cost flow assumption results in lower cost…

A: LIFO means last in first out where as FIFO means first in first out. Inventory and cost of goods…

Q: Lower-of-Cost-or-Market Method On the basis of the data shown below: Inventory Cost per Market Value…

A: Lower of cost or market method can be defined as an inventory valuation method under which the…

Q: If costs are declining, will the LIFO or FIFO method of inventory valuation yield the lower cost of…

A: Inventory cost flow assumptions: These are the methods used by the companies to compute the cost…

Q: Part One: Explanation 1. If merchandise inventory is being valued at cost and the price level is…

A: FIFO, LIFO and weighted average are different cost flow assumptions with regard to the cost of…

Q: Overstating ending inventory in the current year causes net income in the current year to be…

A: 1. True 2. False The weighted-average cost includes both beginning inventory and purchases and is…

Q: Which inventory costing method results in the lowest net income during a period of rising inventory…

A: Answer:LIFO is the correct option

Q: (b) Will the results in (a) be higher or lower than the results under FIFO and LIFO? Ending…

A: Ending inventory is 100 units at the end of June. So the cost of ending inventory as per following…

Q: Which statements below are true? 1. LCM and LCNRV may be applied by individual products, by…

A:

Q: Which one of the following statements is true? a. Under conditions of rising prices, the LIFO…

A: Step 1    Last in, first-out (LIFO) is inventory method in which the costs of the most recent…

Q: Ward Hardware does not expect costs to change dramatically and wants to use an inventory costing…

A: Perpetual Inventory System is an accounting system of valuing the inventory where there is a need…

Q: If merchandise inventory is being valued at cost and the purchase price is steadily falling, which…

A: Inventory can be valued using many ways such as : FIFO LIFO Weighted Average Average cost

Q: 1. Which one of the following types of costs is most likely to be included in determining the cost…

A: Answer to the first question: The type of cost that is directly related to the cost of inventory is…

Q: A business uses a perpetual inventory system. During periods of rising prices, cost of goods sold…

A: In FIFO the earliest  goods ( beginning) will be sold first.

Q: 13.In periods of rising prices, which is an advantage of using the LIFO inventory costing method? a.…

A: LIFO method: LIFO means Last-In-Last-out. Under this method good purchased last are first issued to…

Q: Which cost flow assumption generally results in the highest reported amount of net income in periods…

A: Solution: Under FIFO method, inventory is valued at latest purchase cost. Therefore in period of…

Q: Instructions: 1. Compute the estimated cost of ending inventory using the conservative approach 2.…

A: Particulars  Cost Retail Beginning inventory 650,000 1,200,000 Add: Net Purchases (Purchase -…

Q: During periods of increasing costs, the use of the FIF0 method of costing inventory will result in a…

A: First-in-First-Out (FIFO): In this method, items purchased initially are sold first. So, the value…

Q: 2. Shepherd Cycles does not expect prices to change dramatically and wants to use a method that…

A: An inventory valuation allows a business to assign a monetary value to items in its inventory.…