Acc II Chapter 5 Wild Theory

The inventory method that is best when purchase costs are rising.

• FIFO

• LIFO

If ending inventory is understated net income will be _____________.

• overstated

• understated

Least common method of allocating cost of inventory.

• FIFO

• LIFO

• Weighted Average

• Specific Identification

FOB destination - ABC sells goods to XYZ. Who reports inventory costs?

• ABC

• XYZ

Inventory turnover formula.

• Beginning inventory + Endfing Inventory / 2

• Begiining Inventory - Ending Inventory / 2

• Cost of Goods Sold / Average Inventory

• Cost of Goods Sold X Average Inventory

Assumes costs flow in reverse order incurred.

• FIFO

• LIFO

Best inventory method for food and perishable items.

• LIFO

• FIFO

• Weighted Average

Most common method.

• Weighted Average

• LIFO

• Specific Identification

• FIFO

If beginning inventory is is understated net income will be ___________.

• overstated

• understated

FOB shipping - Company A sells goods to Company B. Who reports inventory costs?

• Company A

• Company B