Chapter 6

Question 1

What type of inventory system determines ending inventory and cost of goods sold at the end of the period based on a physical count?

A) perpetual
B) present
C)periodic
D)FIFO

Answer 1

C)periodic

Question 2

Which shipping terms has the title change on delivery?

A) FOB Shipping

B) FOB Destination

Answer 2

B) FOB Destination

Question 3

In which type of shipping does the buyer pay for the shipping?

A) FOB shipping

B) FOB Destination

Answer 3

A) FOB shipping

Question 4

When costs are increasing, COGS is __________ with FIFO.

Answer 4

Lower

Question 5

When costs are decreasing, Net income is ________ with LIFO.

Answer 5

Higher

Question 6

When costs are decreasing, inventory is _________ with FIFO.

Answer 6

Lower

Question 7

When costs are increasing, income taxes are ______ with LIFO.

Answer 7

Lower

Question 8

In the income statement, which inventory method assigns the units with the oldest costs to cost of goods sold?

A) FIFO

B) LIFO

Answer 8

FIFO