is used & Coatrast the effects of LIFO versus FIFO each. 7. Explais how income c

Question

is used & Coatrast the effects of LIFO versus FIFO each. 7. Explais how income ca ontrast the income statement effect of LIFO versus FIFO i.d are rising and (b) prices are falling (a) prices are rising and (b) prices are talling Explain briefly the application of the LCM concept to the ending inventor income statement inventory s effect on the a perpetual inventory system is used, unit costs of the items sold are k n contrast, when a periodic inventory system is used, unit costs aret the effects of LIFO versus FIFO on cash outflow and inflow 10 Contrast 11. known only at the end of cah and balance sheet when market is lower than cost. 12. Whena correct? sale. I accounting period. Why are these statements LE CHOICE QUESTIONS $250.000:; beginning inve. ses, $90,000. What is 1. Consider the following information: ending inventory, $24,000; sales, $250.000 tory, $3000, selling and administrative expenses, $70,000; and purchases, $90,000. wng goods sold? c. $96,000 d. $84,000 a. $86,000 b. $94,000 2.he imentory costy acompany will afect c. The statement of retained earnings. d. All of the above. a. The balance sheet. b. The income statement. 3. Which of the following is not a component of the cost of inventory a. Administrative overhead c. Raw materials b. Direct labor 4. Consider the following information: beginning inventory. 10 units @ $20 per unit; first purchase 35 d. Factory overhead units @ $22 per unit; second purchase, 40 units @ $24 per unit; 50 units were sold. What is cost of goods sold using the FIFO method of inventory costing? a. $1,090 c. $1,180 d. $1,200 b. $1,060 5. Consider the following information: beginning inventory, 10 units @$20 per unit; first purchase, 35 units @ $22 per unit; second purchase, 40 units@$24 per unit; 50 units were sold. What is cost of goods sold using the LIFO method of inventory costing? a. $1,090 b. $1,060 An increasing inventory turnover ratio a. Indicates a longer time span between the ordering and receiving of inventory c. $1,180 d. $1,200 6. b. Indicates a shorter time span between the ordering and receiving of inventory. c. Indicates a shorter time span between the purchase and sale of inventory d. Indicates a longer time span between the purchase and sale of inventory

Explanation / Answer

1. Answer : C

COGS = (Opening inventory + Purchase - Closing inventory)

(30000+90000-24000) = 96000

2. Answer : D

The inventory method selected by company will affect income statement, balance sheet and retained earning

3. Answer : A

Adminstrative overhead is not component of cost of inventory because indirect expenses are not part of cost of inventory

4. Answer : A

In FIFO method it is assumed that inventory purchased or manufactured first is sold first and newer inventory remains unsold.

5. Answer : C

6. Answer : C

Increasing inventory ratio indicates shorter time span between the purchase and sale of inventory

Unit Rate Amount Beginning inventory 10 20 200 First Purchase 35 22 770 Second Purchase 40 24 960

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.