Indicate Whether Each of the Following Statements Related to Inventory

question 74

Short Answer

Indicate whether each of the following statements related to inventory is true or false.
_____ a) The lower a company's inventory turnover ratio, the higher its cost of financing inventory.
_____ b) The selling price a company charges for its goods probably will not be affected by the inventory cost flow method it uses.
_____ c) Other things being equal, if prices are rising, a company that uses the LIFO inventory method will have a higher amount of total assets than if it had used FIFO.
_____ d) A company that plans to offer a higher level of customer service than its competitors probably will have a higher gross margin percentage than its competitors.
_____ e) The lower of cost or market rule may reduce a company's net income, but it will never increase net income.

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Definitions:

Appreciation Message

Communication that expresses gratitude or recognition of someone's efforts, achievements, or qualities.

Supervisor

An individual who oversees and manages the work and performance of a team to ensure objectives and goals are met efficiently.

Handwritten

Text written by hand with a pen, pencil, or other writing instrument, as opposed to typed.

Deductively

Refers to a logical process wherein conclusions are based on the concordance of multiple premises that are assumed to be true.