81. Firms do not use LIFO because it
A. produces a cost of goods sold figure based on more recent purchase prices.
B. results in lower net income.
C. results in reduced tax payments.
D. matches the actual flow of goods.
E. all of the above
82. In periods of rising purchase prices and increasing inventory quantities, LIFO results in a _____ than either FIFO or the weighted-average cost-flow assumption.
A. higher cost of goods sold; lower reported periodic income; lower current income taxes
B. lower cost of goods sold; lower reported periodic income; lower current income taxes
C. higher cost of goods sold; higher reported periodic income; lower current income taxes
D. higher cost of goods sold; higher reported periodic income; higher current income taxes
E. a lower cost of goods sold; higher reported periodic income; higher current income taxes
83. In periods of falling purchase prices and increasing inventory quantities, LIFO results in a _____ than either FIFO or the weighted-average cost-flow assumption.
A. higher cost of goods sold; lower reported periodic income; lower current income taxes
B. lower cost of goods sold; lower reported periodic income; lower current income taxes
C. higher cost of goods sold; higher reported periodic income; lower current income taxes
D. higher cost of goods sold; higher reported periodic income; higher current income taxes
E. a lower cost of goods sold; higher reported periodic income; higher current income taxes
84. Of the three cost-flow assumptions, when prices rise FIFO results in balance sheet figures that are _____, cost of goods sold will _____, and _____ reported net income
A. closest to current cost, be out of date, highest
B. out of date, closest to current cost, highest
C. closest to current cost, be out of date, lowest
D. out of date, closest to current cost, lowest
E. closest to current cost, closest to current cost, highest
85. Of the three cost-flow assumptions, when inventory costs have been rising and inventory amounts increasing, LIFO results in balance sheet figures that are _____, cost of goods sold will _____, and _____ reported net income
A. closest to current cost, be out of date, highest
B. out of date, closest to current cost, highest
C. closest to current cost, be out of date, lowest
D. out of date, closest to current cost, lowest
E. closest to current cost, closest to current cost, highest
86. Of the three cost-flow assumptions, when prices fall FIFO results in balance sheet figures that are _____, cost of goods sold will _____, and _____ reported net income
A. closest to current cost, be out of date, highest
B. out of date, closest to current cost, highest
C. closest to current cost, be out of date, lowest
D. out of date, closest to current cost, lowest
E. closest to current cost, closest to current cost, highest
87. Of the three cost-flow assumptions, when inventory costs have been falling and inventory amounts increasing, LIFO results in balance sheet figures that are _____, cost of goods sold will _____, and _____ reported net income
A. closest to current cost, be out of date, highest
B. out of date, closest to current cost, highest
C. closest to current cost, be out of date, lowest
D. out of date, closest to current cost, lowest
E. closest to current cost, closest to current cost, highest
88. The requirement that U.S. firms using LIFO for tax reporting purposes must also use LIFO for financial reporting purposes is called the _____ rule.
A. financial/tax conformity rule
B. income tax conformity
C. last-in, first-out method
D. LIFO conformity
E. cost-flow conformity
89. Which of the following accounts would you expect to find on the balance sheet of a manufacturing company?
A. finished goods inventory, raw materials inventory, and merchandise inventory
B. finished goods inventory, work-in-process inventory, and merchandise inventory
C. raw materials inventory, work-in-process inventory, and merchandise inventory
D. finished goods inventory, raw materials inventory, and work-in-process inventory
E. none of the above
90. Cox Merchandising Company began the year with merchandise inventory of $60,000, ended the year with merchandise inventory of $70,000, and had cost of goods sold of $110,000. What was the Cox Merchandising Company's net purchases for the year?
A. $100,000
B. $110,000
C. $120,000
D. $130,000
E. none of the above