Matching
match each item listed with the accounting effect You may use each choice more than once or not at all.
Premises:
During a period of increasing inventory and rising prices, a company decides to use FIFO instead of LIFO.
During a period of increasing inventory and rising prices, a company decides to use Average instead of FIFO.
During a period of increasing inventory and increasing prices, a company uses the LIFO method, which creates the largest cost of goods sold.
A company applies lower-of-cost-or-market for valuing ending inventory when market price is less than cost.
A company applies lower-of-cost-or-market for valuing ending inventory when cost is less than market price.
During an extended period of constant prices, a company adopts LIFO instead of FIFO.
Responses:
Assets and net income increase
Assets and net income decrease
Assets decrease and net income increases
Assets increase and net income decreases
Assets and net income are not affected
Correct Answer:
Premises:
Responses:
During a period of increasing inventory and rising prices, a company decides to use FIFO instead of LIFO.
During a period of increasing inventory and rising prices, a company decides to use Average instead of FIFO.
During a period of increasing inventory and increasing prices, a company uses the LIFO method, which creates the largest cost of goods sold.
A company applies lower-of-cost-or-market for valuing ending inventory when market price is less than cost.
A company applies lower-of-cost-or-market for valuing ending inventory when cost is less than market price.
During an extended period of constant prices, a company adopts LIFO instead of FIFO.
Premises:
During a period of increasing inventory and rising prices, a company decides to use FIFO instead of LIFO.
During a period of increasing inventory and rising prices, a company decides to use Average instead of FIFO.
During a period of increasing inventory and increasing prices, a company uses the LIFO method, which creates the largest cost of goods sold.
A company applies lower-of-cost-or-market for valuing ending inventory when market price is less than cost.
A company applies lower-of-cost-or-market for valuing ending inventory when cost is less than market price.
During an extended period of constant prices, a company adopts LIFO instead of FIFO.
Responses:
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