Which of the Following Statements Is Correct When Inventory Unit

question 114

Multiple Choice

Which of the following statements is correct when inventory unit costs are decreasing?

• A)FIFO's cost of goods sold will be the largest among the inventory costing methods.
• B)LIFO's income tax will be the lowest among the inventory costing methods.
• C)Ending inventory using the FIFO cost method will be higher than the ending inventory when the LIFO method is used.
• D)Cost of goods sold using the average cost method will be less than cost of goods sold when the LIFO method is used.

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Definitions:

FUTA Tax

The Federal Unemployment Tax Act tax, which employers pay to help fund state workforce agencies.

SUTA Tax

A state unemployment tax assessed by individual states on employers, used to fund their unemployment insurance and job service programs.

Medicare

A federal health insurance program in the United States primarily for people aged 65 and older, as well as for some younger individuals with disabilities.

Unemployment Taxes

Taxes imposed on employers based on the employment and wages of employees, used to fund unemployment insurance benefits.