Indicate Whether Each of the Following Statements Is True or False

question 118

Short Answer

Indicate whether each of the following statements is true or false.
1. A US company can use LIFO for income tax purposes only if it also uses LIFO for financial reporting purposes
2. The weighted average cost per unit is computed by dividing the total cost of goods purchased by the dollar amount of sales
3. Under the FIFO method, the cost of goods sold for each sale is computed using the cost of the most recently acquired units
4. In a period of rising inventory prices, use of FIFO allows a company to minimize its income tax expense
5. To compute cost of goods sold under the weighted average method, it is necessary to first make a computation of the weighted average cost per unit

Appreciate the strategic advantages of entering new markets through purchasing activities.

Know the entities involved in facilitating international buying and their roles.

Evaluate the effect of transportation, customs, and exchange rates in international sourcing decisions.

Understand the criteria and tools for evaluating supplier performance.

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Definitions:

Marginal Tax Rate

The percentage of tax applied to your income for each tax bracket in which you qualify, essentially the rate on the last dollar of income earned.

Average Tax Rate

The ratio of the total amount of taxes paid to the total tax base (taxable income or spending), expressed as a percentage.

Total Taxes

The comprehensive amount of taxes paid by an individual or entity, encompassing federal, state, and local taxes.

Individual Income Tax

A tax levied on the income of individuals or households by the government.