【正文】 s yearend LIFO inventory balance was $400,000, their inventory based on FIFO would be: A. $490,000. B. $310,000. C. $486,000. D. $314,000. C Question ID: 14749 If Wallace39。s COGS more closely reflects current costs and therefore provides a better measure of current ine. Question ID: 24752 For balance sheet purposes, inventories based on: A. FIFO are preferable pared to those based on LIFO, as they closely reflect current costs. B. LIFO are preferable pared to those based on weighted average, as they closely reflect the current costs. C. weighted average are preferable pared to those based on FIFO, as they closely reflect the current costs. D. LIFO are preferable pared to those based on FIFO, as they closely reflect the current costs. A The inventories based on FIFO are preferable to those presented under LIFO or weighted average for balance sheet purposes. Under FIFO, the older inventories are taken out first, and the ending inventory balance consists of the recent purchases and thus most closely reflect the current (economic) value. Question ID: 24756 During periods of rising prices and stable or growing inventories, the most informative inventory accounting method for ine statement purposes is: A. FIFO, because it allocates historical prices to cost of good sold (COGS) and provides a better measure of current ine. B. weighted average, because it allocates average prices to cost of good sold (COGS) and provides a better measure of current ine. C. LIFO, because it allocates current prices to cost of good sold (COGS) and provides a better measure of current ine. 9 D. LIFO, because it allocates historical prices to cost of good sold (COGS) and provides a better measure of current ine. C LIFO is the most informative inventory accounting method for ine statement purposes in periods of rising prices and stable or growing inventories. It allocates the most recent purchase prices to COGS and thus provides a better measure of current ine and future profitability. Question ID: 24757 In a world without taxes, using the LIFO method for inventory accounting pared to FIFO will have: A. higher COGS, lower ine, lower cash flows, and lower inventory. B. higher COGS, lower ine, similar cash flows, and lower inventory. C. lower COGS, higher ine, similar cash flows, and lower inventory. D. lower COGS, lower ine, lower cash flows, and lower inventory. B In periods of rising prices and stable or increasing inventory quantities, the LIFO method – as pared with FIFO – will result in higher COGS, lower taxes, lower ine, lower inventory balances, lower working capital, and higher cash flows. In the absence of taxes, the cash flows from both the methods will be same. Question ID: 14730 Which of the following statements regarding inventory accounting methods is TRUE? In periods of: A. declining prices and stable unit purchases, the tax benefits of using LIFO are increased. B. rising prices and stable unit purchases, using the LIFO method results in a lower current ratio than the FIFO method. C. rising prices and stable unit purchases, using the FIFO method results in 10 higher inventory turnover than the LIFO method. D. declining prices FIFO results in higher ine than LIFO. B In periods of rising prices LIFO results in lower current assets because the ending inventory is prised of the inventory items that were purchased first at a lower price. Question ID: 14735 Which of the following statements about inventory are TRUE during periods of rising prices? A. LIFO Gross Profit Margin FIFO Gross Profit Margin. B. LIFO Current ratio FIFO Current Ratio. C. LIFO Debt to Equity Ratio FIFO Debt to Equity Ratio. D. LIFO Inventory Turnover FIFO Inventory Turnover. C If LIFO inventory increases by the LIFO reserve, then deferred taxes and equity are also adjusted upward. Question ID: 17219 Which of the following statements regarding inventory methods used during periods of rising prices is FALSE? A. FIFO results in higher inventory balances. B. LIFO results in lower cost of goods sold. C. FIFO results in higher taxes. D. LIFO results in lower ine. B 11 LIFO results in higher cost of goods sold during periods of rising prices because the last items bought, which are the most expensive, are the first items sold resulting in a higher cost of goods sold. Question ID: 14740 During periods of declining prices, which inventory method would result in the highest ine? A. Current Cost. B. LIFO. C. Weighted Average. D. FIFO. B When prices are declining and LIFO is used the COGS is smaller than if FIFO is used leading to a larger ine. Question ID: 14750 The Orchard Supply Company uses LIFO inventory valuation. Orchard Supply had a cost of goods sold of $1 million for the period. The inventory at the beginning of the period was $ million, and the inventory at the end of the period was $. Orchard Supply39。s after tax ine on a FIFO basis if the firm39。D) costs when specific criteria are met. D. Franchise or license costs for agreements of less than five years are expensed as incurred. A In the ., research and development (Ramp。s LIFO cost of goods sold is $15,000. ? After tax ine is $1,600. ? The previous year39。s inventory according to FIFO inventory valuation? A. $ million. B. $ million. C. $ million. D. $ million. A FIFO Inventory = $ + = $ 12 Question ID: 14757 Given the following inventory information about the Buckner Company: ? Yearend LIFO inventory of $6,500. ? Yearend LIFO reserve of $2,500. ? The current year39。 ROE) in early years and higher in later years. C. higher cash flows from operations and lower cash flow from investing. D. higher debt/equity ratio and higher debt/