LIFO is considered an income-statement approach for reporting inventory because it:
A) Always results in a higher amount of net income being reported.
B) Better approximates the value of ending inventory.
C) Better approximates inventory cost necessary to generate revenue.
D) Always results in a lower amount of net income being reported.
Answer: Better approximates inventory cost necessary to generate revenue.
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Financial Accounting
- Which inventory method is better described as having an income-statement focus and why is it considered as such?
- Which inventory method is better described as having a balance-sheet focus and why is it considered as such?
- FIFO is considered a balance-sheet approach for reporting inventory because it:
- For the month of September, the company sold 35 units. What is cost of goods sold under the weighted-average cost method? (Round weighted-average unit cost to 4 decimals)
- The company reports cost of goods sold of $16,000. Which inventory cost method is the company using?
- What is the cost of goods sold for Julia & Company assuming it uses LIFO?
- What is the ending inventory balance for Julia & Company assuming that it uses FIFO?
- Marvin sold 2,300 units of inventory during the month. Cost of goods sold assuming weighted-average cost would be: (Round weighted-average unit cost to 4 decimals)
- Marvin sold 2,300 units of inventory during the month. Ending inventory assuming weighted-average cost would be: (Round weighted-average unit cost to 4 decimals)
- Marvin sold 2,300 units of inventory during the month. Cost of goods sold assuming LIFO would be:
- Marvin sold 2,300 units of inventory during the month. Ending inventory assuming LIFO would be:
- Marvin sold 2,300 units of inventory during the month. Cost of goods sold assuming FIFO would be:
- Marvin sold 2,300 units of inventory during the month. Ending inventory assuming FIFO would be:
- Dunbar sold 700 units of inventory during the month. Cost of goods sold assuming weighted-average cost would be: (Round weighted-average unit cost to 4 decimals)
- Dunbar sold 700 units of inventory during the month. Ending inventory assuming weighted-average cost would be: (Round weighted-average unit cost to 4 decimals)
- Dunbar sold 700 units of inventory during the month. Cost of goods sold assuming LIFO would be:
- Dunbar sold 700 units of inventory during the month. Ending inventory assuming LIFO would be:
- Dunbar sold 700 units of inventory during the month. Cost of goods sold assuming FIFO would be:
- Dunbar sold 700 units of inventory during the month. Ending inventory assuming FIFO would be:
- At what amount would Shoeless report cost of goods sold using the weighted-average cost flow assumption?
- At what amount would Shoeless report gross profit using LIFO cost flow assumptions?
- At what amount would Shoeless report ending inventory using FIFO cost flow assumptions?
- The inventory cost flow assumption that is least likely to match the physical flow of inventory for most companies is:
- The inventory cost flow assumption that results in a random mixture of goods being included in the balance of inventory and cost of goods sold is:
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