Inventory Cost Assumption

Which of the following inventory costing methods assumes that the first goods purchased are the first to be sold?

• Specific Identification

• FIFO

• Weighted Average

• LIFO

Which inventory valuation method is most suitable for unique, high-value items such as cars or fine jewelry?

• FIFO

• LIFO

• Weighted Average

• Specific Identification

The FIFO method generally results in which of the following during periods of rising prices?

• Higher Cost of Goods Sold and lower net income

• Lower Cost of Goods Sold and higher net income

• Higher ending inventory and lower net income

• Lower ending inventory and higher net income

Under FIFO, the ending inventory is valued at:

• The oldest purchase prices

• The most recent purchase prices

• An average of all purchase prices

• The lowest possible cost

The choice of an inventory cost flow assumption affects which of the following financial statements?

• Balance Sheet only

• Income Statement only

• Both Balance Sheet and Income Statement

• Neither Balance Sheet nor Income Statement

• $180

• $175

• $185

• $190

A business uses the weighted average method. If total inventory cost is $10,000 and total units available are 500, what is the cost per unit?

• $15

• $20

• $25

• $30

Under FIFO, if prices are falling, what will be the impact on net income compared to LIFO?

• Net income will be higher under FIFO

• Net income will be lower under FIFO

• Net income will be the same under both FIFO and LIFO

• Net income will be unpredictable

Which of the following methods provides the most accurate representation of ending inventory in times of inflation?

• FIFO

• LIFO

• Specific Identification

• Weighted Average

What is the total cost using the weighted average method?

• $3,750

• $4,000

• $4,200

• $4,500