Accounting Chapter 7

When costs to purchase inventory are falling over time, using LIFO leads to reporting ______ than FIFO.

- Higher Inventory on the balance sheet

When costs to purchase inventory are rising, using LIFO leads to reporting a ______ than FIFO.

- Lower value for Inventory on the balance sheet

Applying the lower of cost or market rule results in inventory being reported at the ______.

- Market value if lower than cost

On May 1, there were 4 inventory items that cost $30 each. On May 5, 2 items were purchased for $35 each. Given one item from the beginning inventory and one from the May 5 inventory were sold, under the ____ ____ inventory method, cost of goods sold would equal $65.

- Specific - Identification

The company has 1,000 of each of the following items in its inventory: Jeans $20 $21 T-shirts $4 $3 What is the amount of the lower-of-cost-or-market write down, if any?

- The write down would be $1,000