ACCT 331 Chapter 8: Inventories-Measurement

physical similarities

A LIFO inventory pool consists of inventory grouped according to

interest expense

net method views a discount not taken as an:

Under all circumstances

COGS determined under the FIFO Perpetual System method is the same as under the FIFO Periodic inventory system:

How units of goods and their associated costs flow through the system

Dollar amounts are assigned to goods sold and goods remaining in ending inventory by making the assumption regarding what?

moving

In a perpetual inventory system, weighted-average cost becomes _________-average cost

LIFO

In which type of inventory costing system are inventory costs on the balance sheet generally out of date?

Gross Profit Margin

Indicates the percentage of each sales dollar available to cover other expenses

FIFO COGS

LIFO COGS - Change in LIFO reserve

FIFO EI

LIFO EI + LIFO reserve

FIFO

The _________ inventory cost flow assumption typically approximates the actual physical flow of inventory items of most companies

whether a real increase in inventory quantity has occurred

Under the DVL approach, cost indexes are used to determine

a single layer at the average cost of purchases during the period

When a LIFO inventory pool is used and the quantity of ending inventory increases, ending inventory will consist of beginning inventory plus

LIFO

When prices increase, the ________ inventory method provides the best matching of revenues and expenses

LIFO

When prices increase, the ___________ inventory method tends to decrease the company's tax liability during a particular fiscal period relative to other inventory methods

current period ending inventory at base-year cost has increased

When the DVL method is used, a LIFO layer is added when

The periodic system

Which inventory system tends to incur comparatively less cost?

product costs

costs that are included in inventory