PARTIML TIPLE CHOICE QUESTIONS Each questiom is worth THREE) poini.chquestion as
ID: 2573628 • Letter: P
Question
PARTIML TIPLE CHOICE QUESTIONS Each questiom is worth THREE) poini.chquestion aseirele the ONE cerreet answer to each You must answer all questions. I. Which inventory method market value?ing method will produce an amount for ending inventory that is closest to current market A. Weighted average. Speciflc identification FIFO D. LIFO $1.00. Daisy sold one of the items for $24.00 uses FIFO than if weighted average were used 2. Daisy Company purchased two iden S14.00, and the tical inventory items. The item purchased first cost Which of the following statements is true? or the following statements is tr B Cost of goodntory will be lower if Daisy uses weighted average than if FIFO were used. B. Cost of goods sold will be higher if Daisy matter which cost flow C. The dollar amount assigned to ending inventory will be the same no D. Gross margin will be higher if Daisy uses LIFO than it would be if FO method is used 3. Which of the following businesses is most likely to use a specific identification cost fnlow method? A. Hardware store B. Grocery store C. Car dealership D. Thrift shop 4. When prices are rising, which method of inventory, if any, will result in the highest ending inventory? A. Weighted average. B. FIFO. C. LIFO D. None of these; inventory methods cannot affect cash flows.Explanation / Answer
1.FIFO method assumes items purchased first will be sold first. Therefore ending inventory consists of those items purchased at the end of the period. These Prices will produce ending inventory value closest to Current Market Value.
Answer C. FIFO
2.Ending Inventory FIFO = $15, Cost of Goods Sold FIFO= $14
Ending Inventory Weighted Average =( $14+$15)/2= $14.5, Cost of Goods Sold eighted Average =( $14+$15)/2= $14.5
Correct Answer A
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.