Solved

Match Each Item Listed with the Accounting Effect You May

Question 113

Matching

match each item listed with the accounting effect You may use each choice more than once or not at all.

Premises:

Responses:

During a period of increasing inventory and rising prices, a company decides to use FIFO instead of LIFO.

Assets and net income increase

During a period of increasing inventory and rising prices, a company decides to use Average instead of FIFO.

Assets and net income decrease

During a period of increasing inventory and increasing prices, a company uses the LIFO method, which creates the largest cost of goods sold.

Assets decrease and net income increases

A company applies lower-of-cost-or-market for valuing ending inventory when market price is less than cost.

Assets increase and net income decreases

A company applies lower-of-cost-or-market for valuing ending inventory when cost is less than market price.

Assets and net income are not affected

During an extended period of constant prices, a company adopts LIFO instead of FIFO.

Premises:

During a period of increasing inventory and rising prices, a company decides to use FIFO instead of LIFO.

During a period of increasing inventory and rising prices, a company decides to use Average instead of FIFO.

During a period of increasing inventory and increasing prices, a company uses the LIFO method, which creates the largest cost of goods sold.

A company applies lower-of-cost-or-market for valuing ending inventory when market price is less than cost.

A company applies lower-of-cost-or-market for valuing ending inventory when cost is less than market price.

During an extended period of constant prices, a company adopts LIFO instead of FIFO.

Responses:

Assets and net income increase

Assets and net income decrease

Assets decrease and net income increases

Assets increase and net income decreases

Assets and net income are not affected

Correct Answer:

Premises:

Responses:

During a period of increasing inventory and rising prices, a company decides to use FIFO instead of LIFO.

During a period of increasing inventory and rising prices, a company decides to use Average instead of FIFO.

During a period of increasing inventory and increasing prices, a company uses the LIFO method, which creates the largest cost of goods sold.

A company applies lower-of-cost-or-market for valuing ending inventory when market price is less than cost.

A company applies lower-of-cost-or-market for valuing ending inventory when cost is less than market price.

During an extended period of constant prices, a company adopts LIFO instead of FIFO.

Related Questions

Q106: What effect does management's perception of the

Q107: If an entity overstates its ending inventory

Q108: Identify the options a manager has in

Q109: The chief investment officer of a large

Q110: How do inventories of manufacturing companies differ

Q111: Please explain the statement that "a LIFO

Q112: After studying a financial accounting text, your

Q114: match each item listed with the accounting

Q115: match each item listed with the accounting

Q116: For each cost identify which accounting treatment

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

Scan the QR code to install the App and get 2 free unlocks

Unlock quizzes for free by uploading documents