#1

Croder Inc. purchases inventory for $5000 and incurs shipping costs of $100. To record this transaction, Croder debits Inventory for $5000, debits selling expenses for $100 and credits cash for $5,100. Which of the following statements is correct?

A) Net Income is understated

B) All accounts are accurately stated

C) Revenues are understated

D) Assets are overstated

#2

Which of the following statements is incorrect regarding LIFO and LIFO?

A) In a period of increasing costs, assets will be greater under LIFO than FIFO

B) In a period of increasing costs, net income will be greater under FIFO than LIFO

C) In a period of decreasing costs, FIFO will result in lower total assets than LIFO

D) In a period of decreasing costs, LIFO will result in greater net income than FIFO