If a Company Uses Periodic Inventory and FIFO When Prices

question 27

Multiple Choice

If a company uses periodic inventory and FIFO when prices are falling, the effect will:

• A)reduce cost of goods sold.
• B)increase the inventory ending balance on the balance sheet.
• C)reduce the gross margin.
• D)increase the gross margin.

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Definitions:

Rent Payments

Periodic payments made by tenants to landlords in exchange for the use of residential or commercial property.

Lease Term

The duration for which a lease agreement is effective, specifying the start and end dates of the rental period.

Caveat Emptor

A Latin phrase meaning "let the buyer beware," indicating that the buyer takes the risk regarding the quality and condition of the product.

Marketable Title

A title to real property that is free from significant encumbrances or defects, and thus can be sold or transferred easily to another party.