60.The principle of consistency states that:
A. Companies are prohibited from ever changing their accounting methods.
B. Every company in the same industry must use the same accounting principle.
C. There must be a consistent blend to the accounting principles.
D. If changes in accounting principles are made, the reasons for the change and the effects on the company's net income must be disclosed.
61.From an accounting point of view, one implication of an effective just-in-time inventory system is that:
A. Sales transactions must be recorded using on-line point-of-sale terminals.
B. Inventories are less material in dollar amount and alternative inventory flow assumptions will produce more similar results.
C. The cost of goods sold is significantly reduced.
D. Purchases of merchandise are recorded as cash payments are made, and sales transactions are recorded as cash is received.
62.If all things are equal, except one company uses LIFO during inflation and the other uses FIFO, then:
A. The LIFO company will have a higher inventory turnover.
B. The FIFO company will have a higher inventory turnover.
C. The two companies will have the same inventory turnover.
D. Inventory valuation methods do not effect inventory turnover calculations.
63.An advocate of just-in-time inventory system would say:
A. Maintain a large inventory selection for customers.
B. Leave extra time in order to make inventory deadlines.
C. Maintain a small inventory supply.
D. LIFO is preferred over FIFO.
64.During periods of rising prices, and being primarily concerned with tax implications, most of the companies would select:
A. LIFO.
B. FIFO.
C. Specific identification.
D. The inventory valuation does not affect taxation.
65.For the purpose of delaying income taxes, during an inflationary period, which method would be best?
A. LIFO.
B. FIFO.
C. Average cost.
D. Taxes would be the same under each assumption.
66.Refer to the information above. Assuming that Beech Soda uses the FIFO cost flow assumption, the cost of goods sold to be recorded at January 14 is:
A. $278.
B. $268.
C. $393.
D. $673.
67.Refer to the information above. Assuming that Beech Soda uses the LIFO cost flow assumption, the cost of goods sold to be recorded at January 14 is:
A. $393.
B. $268.
C. $278.
D. $673.
68.Refer to the information above. Assuming that Beech Soda uses the average cost flow assumption, the cost of goods sold to be recorded at January 14 is (round your intermediate calculation to one decimal place and cost per unit to the nearest cent):
A. $317.50.
B. $308.25.
C. $272.50.
D. $673.00.
69.Refer to the information above. Assuming that Beech Soda uses the FIFO cost flow assumption, the 28 units of this product in inventory at January 31 have a total cost of:
A. $400.
B. $395.
C. $405.
D. $410.