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Match Each of the Following Terms with the Descriptions Below

Question 23

Matching

Match each of the following terms with the descriptions below.

Premises:

Responses:

This costing system assumes the last items in are the first items sold.

Specific Identification

The ending inventory represents the most recent purchase.

LIFO

In periods of inflation this inventory method will result in the lowest income tax.

FIFO

The cost of goods sold represents the most recent purchases.

A costing system where the actual cost of the item sold is matched with the sale of the item.

This costing system assumes the first item purchased is the first item sold

Premises:

This costing system assumes the last items in are the first items sold.

The ending inventory represents the most recent purchase.

In periods of inflation this inventory method will result in the lowest income tax.

The cost of goods sold represents the most recent purchases.

A costing system where the actual cost of the item sold is matched with the sale of the item.

This costing system assumes the first item purchased is the first item sold

Responses:

Specific Identification

LIFO

FIFO

Correct Answer:

Premises:

Responses:

This costing system assumes the last items in are the first items sold.

The ending inventory represents the most recent purchase.

In periods of inflation this inventory method will result in the lowest income tax.

The cost of goods sold represents the most recent purchases.

A costing system where the actual cost of the item sold is matched with the sale of the item.

This costing system assumes the first item purchased is the first item sold