Indicate Whether Each of the Following Statements Is True or False

question 57

Short Answer

Indicate whether each of the following statements is true or false.
_____ a) The FIFO cost flow method may only be used if the company actually rotates inventory so that the oldest inventory is sold first.
_____ b) In a period of rising prices, LIFO gives higher cost of goods sold than FIFO.
_____ c) Under the weighted average cost flow method, the cost per unit of ending inventory is equal to the cost per unit of inventory sold.
_____ d) In a period of declining prices, LIFO will result in lower income tax expense than FIFO.
_____ e) In a period of rising prices, FIFO gives higher ending inventory than LIFO does.

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Definitions:

Snowflakes

Ice crystals that form in clouds when water vapor freezes, creating unique patterns that fall to the ground as snow.

Interlocking Crystals

A texture in igneous rocks where the crystals are so closely fitted together that they interlock, providing strength and coherence to the rock.

Insulated

Protected from heat loss or gain by surrounding with material that reduces heat transfer, often used in reference to buildings or electrical components.

Dense

Having a high mass per unit volume; closely compacted in substance.