Question : 41.The specific identification method more appropriate than a cost flow : 1237679

 

 

41.The specific identification method is more appropriate than a cost flow assumption method:   

A. For a large inventory of identical low-priced items.

 

B. If each item in the inventory is unique.

 

C. If purchase costs are rising.

 

D. If purchase costs are falling.

 

 

 

 

42.When the LIFO costing method is in use, the seller:   

A. Must sell the most recently acquired units first.

 

B. Must sell the oldest unit in inventory first.

 

C. Assumes that the most recently acquired units are sold first.

 

D. Assumes that the oldest units in inventory are sold first.

 

 

 

 

43.Which of the following statements is not a characteristic of the LIFO method of pricing inventory?   

A. During a period of rising prices, LIFO tends to minimize the amounts of income taxes owed.

 

B. The cost of goods sold is measured in relatively current costs.

 

C. Inventory is valued at relatively current costs.

 

D. During a period of falling prices, LIFO tends to maximize the amounts of income taxes owed.

 

 

 

 

44.Which of the following methods of measuring the cost of goods sold most closely parallels the actual physical flow of the merchandise?   

A. LIFO.

 

B. FIFO.

 

C. Average cost.

 

D. Specific identification.

 

 

 

 

45.In a perpetual inventory system, the flow of inventory cost is:   

A. First through the income statement, then through the balance sheet.

 

B. First through the balance sheet, then through the income statement.

 

C. Only through the balance sheet and not the income statement.

 

D. Only through the income statement and not the balance sheet.

 

 

 

 

46.Which of the following results in the cost of goods sold being stated at the most current acquisition costs?   

A. Average cost.

 

B. Specific identification.

 

C. FIFO.

 

D. LIFO.

 

 

 

 

47.Which of the following results in the inventory being stated at the most current acquisition costs?   

A. Specific identification.

 

B. LIFO.

 

C. FIFO.

 

D. Average cost.

 

 

 

 

48.During a period of steadily falling prices, which of the following methods of measuring the cost of goods sold is likely to result in reporting the highest gross profit?   

A. Specific identification.

 

B. Average cost.

 

C. LIFO.

 

D. FIFO.

 

 

 

 

49.During a period of steadily falling prices, which of the following methods of measuring the cost of goods sold is likely to result in the lowest taxable income?   

A. LIFO.

 

B. FIFO.

 

C. Average cost.

 

D. Specific identification.

 

 

 

 

50.In a period of rising prices, a company is most likely to use the specific identification method of pricing inventory if:   

A. Each item in the inventory is unique.

 

B. Management wants the same unit cost assigned to items sold and items remaining in inventory.

 

C. Management’s primary objective is to minimize income taxes.

 

D. Management wants the company’s income statement to indicate the highest possible amounts of gross profit and net income.