Circle True or False 1. In all cases when FIFO is used, the cost of goods sold w

Question

Circle True or False 1. In all cases when FIFO is used, the cost of goods sold would be the same whether of goods a perpetual or perlodic system is used. True or False 2. Use of LIFO provides a tax benefit in an industry as production increases. True or False an industry where unit costs tend to decrease 3. LIFO is inappropriate True or False where unit costs tend to decrease as production increases. 4. The LIFO conformity rule requires that if a company uses LIFO for tax purposes, it must also use LIFO for financial 5. If ending inventory 6. If both purchases and ending inventory are overstated by the same accounting purposes. True or False is understated, then net income is understated. True or False amount, net income is not affected. True or False 7. GAAP requires reporting inventory at net realizable value, even if a bove cost, whenever there is a controlled market with a quoted price applicable to all quantities. True or False 8. A reason for valuing inventory at net realizable value is that sometimes it is too difficult to obtain the cost figures. True or False Application of the lower-of-cost-or-market rule results in inconsistency because a 9. company may value inventory at cost in one year and at market in the next year. True or False 0. The lower-of-cost-or-market method is used for inventory despite being less conservative than valuing inventory at market value. True or False The purpose of the "floor" in lower-of-cost-or-market considerations is to avoid overstating inventory. True or False ompanies usually make bond interest payments semiannually, although the terest rate is generally expressed as an annual rate. True or False he market rate is greater than the coupon rate, bonds will be sold at a premium. e or False

Explanation / Answer

Ans 1 TRUE

ANS 2 FALSE

Use of LIFO provides tax benefit in an industry where unit cost tend to increase as production increase.

ANS 3 TRUE

ANS 4 TRUE

AS PER CHEGG POLICY, WE CAN ANSWER ONLY 4 PARTS AT A TIME.

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