Of the Three Cost-Flow Assumptions, When Prices Fall FIFO Results

question 102

Multiple Choice

Of the three cost-flow assumptions, when prices fall FIFO results in balance sheet figures that are _____, cost of goods sold will _____, and _____ reported net income

• A)closest to current cost, be out of date, highest
• B)out of date, closest to current cost, highest
• C)closest to current cost, be out of date, lowest
• D)out of date, closest to current cost, lowest
• E)closest to current cost, closest to current cost, highest

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Definitions:

Romantic Love

A complex emotional and physiological experience, typically involving attraction, attachment, and idealization of another person.

Merchandise Inventory

Goods held by a company for the purpose of resale to customers in the regular course of business.

Beginning Inventory

The value of all the inventory held by a company at the start of an accounting period, used to calculate the cost of goods sold.

Net Purchases

The total amount of purchases made by a business after subtracting returns, allowances, and discounts.