86.What is the amount of the inventory at the end of the year using the FIFO method?
a. $1,685
b. $1,575
c. $1,805
d. $3,585
87.What is the amount of the inventory at the end of the year using the LIFO method?
a. $1,685
b. $1,575
c. $1,805
d. $3,815
88.What is the amount of the inventory at the end of the year rounded to nearest dollar using the average costmethod?
a. $1,685
b. $1,575
c. $1,805
d. $3,705
89.If Beginning Inventory (BI) + Purchases (P) – Ending Inventory (EI) = Cost of Merchandise Sold (COMS), anequivalent equation can be written as
a.BI + P = COMS – EI
b.BI – P = COMS + EI
c.BI + P = COMS + EI
d.EI + P = COMS – BI
90.During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost ofmerchandise sold is
a.FIFO
b.LIFO
c.average cost
d.weighted average
91.During times of rising prices, which of the following is
notan accurate statement?
a.Average costing will yield results that are between those of FIFO and LIFO.
b.LIFO will result in a higher cost of merchandise sold than FIFO.
c.FIFO will result in a higher net income than LIFO.
d.LIFO will result in higher income taxes than FIFO.
92.If the revenues are correctly reported and the gross profit of a company is understated, what is the effect onowner’s equity?
a.understated
b.overstated
c.correctly stated
d.none of these
93.If merchandise inventory is being valued at cost and the price level is steadily rising, the method of costing that willyield the highest net income is
a.periodic
b.LIFO
c.FIFO
d.average cost
94.If merchandise inventory is being valued at cost and the purchase price is steadily falling, which method of costingwill yield the largest net income?
a.average cost
b.LIFO
c.FIFO
d.weighted average
95.Which of the following will be the same amount regardless of the cost flow assumption adopted?
a.number of items ordered
b.gross profit
c.cost of goods sold
d.ending merchandise inventory