1. In periods of rising prices, the inventory costing method which results in the inventory value on the balance sheet that is closest to current cost is the a. FIFO method. b. LIFO method. c. average cost method. d. tax method. 2. Two companies report the same cost of goods available for sale but each employs a different inventory costing method. If the price of goods has increased during the period, then the company using a. LIFO will have the highest ending inventory. b. FIFO will have the highest cost of good sold. c. FIFO will have the highest ending inventory. d. LIFO will have the lowest cost of goods sold. 3. If companies have identical inventoriable costs but use different inventory costing methods when the price of goods have not been constant, then the a. cost of goods sold of the companies will be identical. b. cost of goods available for sale of the companies will be identical. c. ending inventory of the companies will be identical. d. net income of the companies will be identical. 4. In a period of increasing prices, which inventory costing method will result in the lowest amount of income tax expense? a. FIFO b. LIFO c. Average Cost d. Income tax expense for the period will be the same under all assumptions. 5. The managers of Tong Company receive performance bonuses based on the net income of the firm. Which inventory costing method would result in the highest bonuses for the managers in periods of rising prices? a. LIFO b. Average Cost c. FIFO d. Physical inventory method