Use I = Increase, D = Decrease, or N =

question 20

Essay

Use I = Increase, D = Decrease, or N = No effect, to indicate the effect on retained earnings for each of the listed transactions.

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Definitions:

Periodic LIFO

An inventory valuation method where the last items placed in inventory are the first ones counted as sold, calculated at the end of an accounting period.

Cost of Goods Sold

Represents the direct costs attributable to the production of the goods sold by a company.

Ending Inventory

Ending inventory is the total value of all products, raw materials, and finished goods that are not sold at the end of an accounting period.

LIFO Perpetual

An inventory valuation method where the last items added to inventory are assumed to be the first sold, updated continuously throughout the accounting period.