When prices are rising, valuing ending inventory using the FIFO method rather than LIFO gives
A) inventory a higher value but lowers net income.
B) inventory a lower value and also lowers net income.
C) both inventory and net income a higher value.
D) inventory a lower value and net income a higher value.
Answer: C
Learn More :
FIN202 Chapter 3
- Which one of the following is NOT true for a corporation?
- Clarity Music Company has a marginal tax rate of 34 percent and an average tax rate of 32 percent this year. It is planning to construct a new recording studio next year. The appropriate tax rate to be applied on the income generated from the new studio is
- Trident Corporation had the following cash flows in the current year. Which one of the following is a financing activity cash flow?
- Which one of the following is NOT a cash flow from investing activities?
- Cash flows from financing activities include all but one of the following:
- Which one of the following is NOT a cash flow from operating activities?
- Which one of the following are NOT all noncash items?
- The major disadvantages of market-value accounting include
- Which of the following is NOT true about treasury stock?
- Which one of the following is NOT true about goodwill?
- When prices are falling, valuing inventory using the LIFO method rather than FIFO gives
- Petra, Inc., has $400,000 as current assets, $1.225 million as plant and equipment, and $250,000 as goodwill. In preparing the balance sheet, these assets should be listed in which of the following orders?
- The conventional way of preparing a balance sheet is to list all assets in the order of their
- Trekkers Footwear bought a piece of machinery on January 1, 2006 at a cost of $2.3 million, and the machinery is being depreciated annually at an amount of $230,000 for 10 years. Its market value on December 31, 2008 is $1.75 million. The firm's accountant is preparing its financial statement for the fiscal year end on December 31, 2008. The asset's value should be recognized on the balance sheet at
- The cost principle states that an asset should be recognized on the balance sheet at
- On June 23, 2008, Mikhal Cosmetics sold $250,000 worth of its products to Rynex Corporation, with the payment to be made in 90 days on September 20. The goods were shipped to Rynex on July 2. The firm's accountants should recognize the sale on
- According to the realization principle, revenue from a sale of the firm's products are recognized
- Tyson Corporation bought raw materials on April 23, 2008 and also on July 2, 2008. Products produced in the months of May were sold in July. The firm uses FIFO to value its inventory. According to the matching principle, the firm's accountant should associate
- The matching principle calls for the accountant of a firm to
- Dell Computer Corporation has receivables of $2.5 million and inventory worth $1.8 million. The firm plans to borrow $2 million for working capital purposes from Austin First National Bank. In evaluating the loan request, the bank should place the most emphasis on
- The going concern assumption implies that
- Your uncle, who has a second home in Bethany Beach, Delaware, is planning to sell it in the next few weeks. You are interested in buying this beachside property, so your agent negotiates a price for the house with your uncle's agent. This transaction is an example of
- The assumption of arm's-length transaction states that
- Accounting standards prescribed by GAAP are important because
If the answers is incorrect or not given, you can answer the above question in the comment box. If the answers is incorrect or not given, you can answer the above question in the comment box.