1. FIFO uses the ______ cost for cost of goods sold on the income statement and the ______ cost for inventory on the balance sheet.
newest; newest
newest; oldest
oldest; oldest
oldest; newest
2. Which inventory costing method uses the oldest cost for cost of goods sold on the income statement and the newest cost for inventory on the balance sheet?
LIFO
Specific identification
FIFO
Weighted average
3. LIFO uses the ______ unit costs for cost of goods sold on the income statement and the ______ unit costs for inventory on the balance sheet.
newest; oldest
oldest; oldest
oldest; newest
newest; newest
4. If inventory is updated periodically, which of the equations is correct?
Cost of goods sold = Beginning inventory + Purchases − Ending inventory
Cost of goods sold = Beginning inventory + Purchases + Ending inventory
Beginning inventory + Purchases = Ending inventory
Ending inventory = Beginning inventory + Purchases + Cost of goods sold
5. If inventory is updated perpetually, which of the equations is correct?
Cost of goods sold = Beginning inventory − Purchases − Ending inventory
Cost of goods sold = Beginning inventory + Purchases + Ending inventory
Ending inventory = Beginning inventory + Purchases − Cost of goods sold
Ending inventory = Beginning inventory + Purchases + Cost of goods sold
6. Goods available for sale equals:
Cost of Goods Sold plus ending inventory.
Cost of Goods Sold minus ending inventory.
Beginning inventory plus Cost of Goods Sold.
Beginning inventory plus Purchases minus Cost of Goods Sold.
7. Assume a periodic inventory system is used. Which inventory costing method generally results in the most recent costs being assigned to ending inventory?
LIFO
FIFO
Weighted average cost
Simple average cost