Q6. In an inflationary environment, a company’s: A) net income will be larger if it uses LIFO than if it uses FIFO. B) COGS sold will be lower if it uses LIFO as opposed to FIFO. C) assets will be lower if it uses last in, first out (LIFO) as opposed to FIFO.
Q7. During a period of rising prices, the financial statements of a firm using first in, first out (FIFO) reporting, instead of last in, first out (LIFO) reporting would show: A) lower total assets and higher net income. B) lower total assets and lower net income. C) higher total assets and higher net income.
Q8. A firm ended the last period with inventory of $4.0 million and a last in, first out (LIFO) reserve of $175,000. During the year, it made purchases of $2.0 million and reported sales of $5.5 million with a gross margin of 0.32. At the end of the year, it reported a LIFO reserve of $75,000. What is the value of the firm’s cost of goods sold (COGS) on a first in, first out (FIFO) basis? A) $3,640,000. B) $3,740,000. C) $3,840,000.
Q9. A firm ended the last period with inventory of $3.0 million and a last in, first out (LIFO) reserve of $40,000. During the year, it made purchases of $1 million and reported sales of $4 million with a gross margin of 0.58. At the end of the year, it reported a LIFO reserve of $75,000. What is the value of the firm’s ending inventory converted to a first in, first out (FIFO) basis? A) $2,360,000. B) $2,320,000. C) $2,395,000.
Q10. During periods of declining prices, which inventory method would result in the highest net income? A) LIFO. B) Average Cost. C) FIFO.
Q11. Which of the following statements regarding inventory methods used during periods of rising prices is least accurate? A) FIFO results in higher inventory balances than LIFO. B) FIFO results in higher taxes than LIFO. C) LIFO results in lower cost of goods sold than FIFO.
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发表于 2009-1-19 09:38
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