Q6. Which of the following statements is least accurate? A) In a period of rising prices, LIFO gives the best COGS, whereas FIFO gives the best inventory balance on the balance sheet. B) LIFO produces a tax benefit in a period of rising prices, therefore results in higher cash flows than FIFO. C) In a period of rising prices, FIFO gives the best COGS, whereas LIFO gives the best inventory balance on the balance sheet.
Q7. Which accounting methods are preferable for income statements and balance sheets? A) Last in, first out (LIFO) for income statements and first in, first out (FIFO) for the balance sheet. B) Last in, first out (LIFO) for the balance sheet and first in, first out (FIFO) for the income statement. C) First in, first out (FIFO) for both income statements and balance sheets.
Q8. Assuming inventory levels remain constant during the year and prices have been stable over time, COGS would be: A) the same for both LIFO and FIFO. B) higher under LIFO than FIFO or average cost. C) higher under the average cost than LIFO or FIFO.
Q9. During inflationary periods, which of the following statements is TRUE?
A) LIFO will generate higher earnings, but lower after tax cash flows. B) FIFO will generate higher earnings, but lower after tax cash flows. C) LIFO will generate lower earnings, but lower after tax cash flows.
Q10. Which is the preferred inventory method for purposes of analysis and which is the preferred method for reporting cost of goods sold? Inventory Analysis COGS
A) FIFO LIFO B) LIFO FIFO C) LIFO LIFO
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发表于 2009-1-19 09:33
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