If a company has four lots of products for sale, purchase 1 (earliest) for $17, purchase 2 (middle) for $15, purchase 3 (middle) for $12, and purchase 4 (latest) for $14, which cost would be assumed to be sold first using LIFO costing?

A.$15

B.$12

C.$14

D.$17

When inventory items are highly specialized, the best inventory costing method is ________.

A.specific identification

B.first-in, first-out

C.weighted average

D.last-in, first-out

On which financial statement would the merchandise inventory account appear?

A.Income statement

B.Balance sheet

C.Both balance sheet and income statement

D.Neither balance sheet nor income statement

When would using the FIFO inventory costing method produce higher inventory account balances than the LIFO method would?

A.Deflationary times

B.Inflationary times

C.Always

D.Never

Which accounting rule serves as the primary basis for the lower-of-cost-or-market methodology for inventory valuation?

A.conservatism

B.optimism

C.pessimism

D.consistency

Which type or types of inventory timing system (periodic or perpetual) requires the user to record two journal entries every time a sale is made.

A.Periodic

B.Perpetual

C.Both periodic and perpetual

D.Neither periodic nor perpetual

Which of these statements is false?

A.Goods available for sale - Beginning inventory = Purchases

B.If cost of goods sold is incorrect, ending inventory is usually incorrect too.

C.Ending Inventory + Cost of goods sold = Goods available for sale

D.Beginning Inventory + Purchases = Cost of goods sold

Which of the following describes features of a perpetual inventory system?

A.Technology is normally used to record inventory changes.

B.Merchandise bought is recorded as purchases.

C.An adjusting journal entry is required at year end, to match physical counts to the asset account.

D.Inventory is updated at the end of the period.

If a company has three lots of products for sale, purchase 1 (earliest) for $17, purchase 2 (middle) for $15, purchase 3 (latest) for $12, which of the following statements is true?

A.This is an inflationary cost pattern.

B.This is a deflationary cost pattern.

C.The next purchase will cost less than $12.

D.None of these statements can be verified.

Which of the following financial statements would be impacted by a current-year ending inventory error, when using a periodic inventory updating system?

A.Income statement

B.Balance sheet

C.Neither statement

D.Both statements