1. In order t o pay the least income tax possible in periods of rising inventory
ID: 2434866 • Letter: 1
Question
1. In order t o pay the least income tax possible in periods of rising inventory costs , the company should use which of following inventory costing methods ?A. Average cost C. Specific identification
B. FIFO D. CIFO
2. The ending physical inventory count revised for adjustments listed on the balance sheet as a :
A . Long – term asset.
B. current asset after accounts receivable
C. Current asset immediately after cash .
D. Current asset before accounts receivable.
3. A method of valuing inventory based on the assumption that the oldest goods will be sold first is called the:
A. Specific cost method C. FIFO Method
B. Average cost method D. LIFO Method
4- …………………… helps investors compare a company’s Financial Statements from one period to the next:
A.Consistency C. Objectivity
B.Entity D. Reliability
5. Change From LIFO to FIFO over two accounting periods could be viewed as violation of what accounting concept or principle ?
A. Entity C. Consistency
B. Materiality D. Conservatism
6. Cost of goods sold is shown on the :
A. Statement of retained earnings
B. Balance sheet as asset
C. Income statement before gross profit
D. Income Statement after gross profit
Explanation / Answer
1. In order t o pay the least income tax possible in periods of rising inventory costs , the company should use which of following inventory costing methods ? D. LIFO 2. The ending physical inventory count revised for adjustments listed on the balance sheet as a : B. current asset after accounts receivable 3. A method of valuing inventory based on the assumption that the oldest goods will be sold first is called the: C. FIFO Method 4- …………………… helps investors compare a company’s Financial Statements from one period to the next: A. Consistency 5. Change From LIFO to FIFO over two accounting periods could be viewed as violation of what accounting concept or principle ? C. Consistency 6. Cost of goods sold is shown on the : C. Income statement before gross profit
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