107.In durations of rising prices, the inventory an approach which outcomes in the inventory worth on the balance sheet the is closest come current expense is the

a.FIFO method.

You are watching: In a period of rising prices, the costs allocated to ending inventory may be understated in the

b.LIFO method.

c.average-cost method.

d.tax method.




108.Two suppliers report the same price of goods easily accessible for sale yet each employs a various inventory costing method. If the price of goods has increased throughout the period, climate the company using

a.LIFO will have the highest finishing inventory.

b.FIFO will have the highest cost of good sold.

c.FIFO will have actually the highest ending inventory.

d.LIFO will have actually the lowest cost of items sold.



109.If companies have actually identical inventoriable costs however use different inventory flow presumptions when the price of products have not to be constant, then the

a.cost of products sold that the providers will be identical.

b.cost the goods available for revenue of the providers will it is in identical.

c.ending perform of the service providers will it is in identical.

d.net earnings of the providers will it is in identical.



110.In a period of boosting prices, i m sorry inventory flow presumption will result in the lowest amount of income tax expense?



c.Average Cost

d.Income tax price for the period will it is in the very same under every assumptions.



111.The supervisors of Constantine agency receive performance bonuses based upon the net earnings of the firm. I beg your pardon inventory costing an approach are they most likely to donate in periods of decreasing prices?


b.Average Cost


d.Physical list method



112.In periods of inflation, phantom or record profits might be reported as a result of utilizing the

a.perpetual inventory method.

b.FIFO costing assumption.

c.LIFO costing assumption.

d.periodic inventory method.



113.Selection that an perform costing technique by monitoring does not usually rely on

a.the fiscal year end.

b.income declare effects.

c.balance sheet effects.

d.tax effects.



114.In a duration of rising prices, the costs allocated to finishing inventory may be understated in the

a.average-cost method.

b.FIFO method.

c.gross profit method.

d.LIFO method.



115.The accountant at Almira firm is figuring the end the difference in earnings taxes the agency will pay depending on the an option of one of two people FIFO or LIFO together an perform costing method. The tax price is 30% and also the FIFO method will result in income before taxes of $5,460. The LIFO technique will an outcome in income prior to taxes the $4,860. What is the distinction in tax that would certainly be paid between the two methods?




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d.Cannot be figured out from the information provided.



116.The accountant in ~ Cedric company has determined that income prior to income taxes price to $7,000 using the FIFO costing assumption. If the revenue tax price is 30% and also the quantity of revenue taxes paid would be $225 better if the LIFO presumption were used, what would be the amount of income prior to taxes under the LIFO assumption?