答案和详解如下： 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. Correct answer is C) If prices are rising steadily, FIFO inventory is valued at the more recent purchase prices which are higher and provide a better estimate of the replacement value of the inventory. LIFO costing will produce a cost of goods sold much closer to replacement cost which provides a better estimate than using FIFO. 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. Correct answer is A) LIFO allocates the most recent prices to the cost of goods sold and provides a better measure of current income. For balance sheet purposes, inventories based on FIFO are preferable since these values most closely resemble current cost and economic value. 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. Correct answer is A) During stable prices inventory levels are the same for both LIFO and 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. Correct answer is B) During inflation, FIFO will generate higher earnings because cost of goods will be lower than if LIFO was used. However, LIFO will generate higher cash flows since cash outflows for taxes will be lower for LIFO. 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 Correct answer is A) FIFO LIFO Best---->\ Inv / \ COGS / <--- Best \ COGS / \ Inv / | 
发表于 2009-1-19 09:33
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