21. Which cost flow assumption assumes that the most recently purchased goods are still in inventory?
A. FIFO
B. LIFO
C. Average cost
D. Specific identification
22. Which cost flow assumption assumes that the goods purchased first are still in inventory?
A. FIFO
B. LIFO
C. Average cost
D. Specific identification
23. Which cost flow assumption does not distinguish the costs among units sold and inventory still on hand?
A. FIFO
B. LIFO
C. Average cost
D. Specific identification
24. For which cost flow assumption would the cost of the units sold be the same as the cost of the units still on hand?
A. FIFO
B. LIFO
C. Average cost
D. Specific identification
25. Which cost flow assumption assigns the actual cost of a unit to that unit of inventory?
A. FIFO
B. LIFO
C. Average cost
D. Specific identification
26. Which of the following businesses would most likely use the specific identification method to value inventory?
A. Department store
B. Food distributor
C. Car dealership
D. Electronic components manufacturer
27. Which of the following cost flow assumptions would most likely be used when inventory is expensive and unique?
A. FIFO
B. LIFO
C. Average cost
D. Specific identification
28. The use of the FIFO cost flow assumption:
A. means that the oldest inventory is considered to be the first sold.
B. ensures that the ending inventory contains the oldest inventory costs.
C. requires that a periodic inventory system be used.
D. results in the best matching of costs to the physical flow of goods.
29. Which of the following cost flow assumptions will result in the same ending inventory under both the perpetual and periodic inventory systems?
A. FIFO
B. LIFO
C. Average cost
D. Net realizable value
30. During a period of rising prices, which of the following cost flow assumptions will result in the highest cost of goods sold?
A. FIFO
B. Net realizable value
C. Average cost
D. Specific identification