31) FIFO is the cost flow method that attaches the costs of the first-in units to the units in ending inventory.
32) LIFO is the cost flow method that attaches the last-in costs to the units sold.
33) GAAP allow different cost flow methods to be used when accounting for inventory.
34) IFRS do not allow the LIFO cost flow method to be used when accounting for inventory.
35) In a period of rising inventory costs, the LIFO method would result in the highest net income.
36) In a period of rising inventory costs, the LIFO method would result in the highest cash flow from operations.
37) Assume that Tango Company had a beginning inventory of 100 units at a cost of $2.00 per unit. Current period purchases were 400 units at a cost of $4.00 per unit. The weighted average cost of each unit is $3.
38) In a time of rising prices, the main reason a company would choose to use LIFO is to save on income taxes.
39) In a time of rising prices, the main reason a company would choose to use FIFO is to save on income taxes.
40) The cost flow method a firm uses is disclosed in the notes to the financial statements.
41) A company must use the inventory cost flow assumption that most closely resembles the actual physical flow of goods.
42) In times of rising prices, a company that uses LIFO will report a higher Accounts payable balance than if it had used FIFO.
43) In times of rising prices, a company that uses LIFO will report higher sales than if it had used FIFO.