1. In a period of rising prices, FIFO will have

Select one:

a. lower net income than LIFO.

b. lower cost of goods sold than LIFO.

c. lower income tax expense than LIFO.

d. lower net purchases than LIFO.

2.

An error in the physical count of goods on hand at the end of a period resulted in a $10,000 overstatement of the ending inventory. The effect of this error in the current period is

Select one:

a. both cost of goods sold and net income are understated

b. both cost of goods sold and net income are overstated

c. cost of goods sold is understated but net income is overstated

d. cost of goods sod is overstated but net income is understated