Select all that applyWhich statement are true? (Select all that apply.)Multiple select question.Specific identification, weighted average cost, LIFO and FIFO are generally accepted costing methods.The inventory costing methods determine the amount of the debit to Cost of Goods Sold and credit to Inventory.The inventory method used must correspond with the actual physical flow of goods.The inventory methods apply to both perpetual and periodic inventory systems.
Question
Select all that applyWhich statement are true? (Select all that apply.)Multiple select question.Specific identification, weighted average cost, LIFO and FIFO are generally accepted costing methods.The inventory costing methods determine the amount of the debit to Cost of Goods Sold and credit to Inventory.The inventory method used must correspond with the actual physical flow of goods.The inventory methods apply to both perpetual and periodic inventory systems.
Solution
-
Specific identification, weighted average cost, LIFO and FIFO are generally accepted costing methods. - True. These are all recognized methods for inventory costing under Generally Accepted Accounting Principles (GAAP).
-
The inventory costing methods determine the amount of the debit to Cost of Goods Sold and credit to Inventory. - True. The method chosen for inventory costing directly affects the value of the inventory on the balance sheet, and the cost of goods sold on the income statement.
-
The inventory method used must correspond with the actual physical flow of goods. - False. The inventory costing method used does not have to match the physical flow of goods. For example, a company can use the LIFO (Last-In, First-Out) method for accounting purposes even if the actual flow of goods follows the FIFO (First-In, First-Out) method.
-
The inventory methods apply to both perpetual and periodic inventory systems. - True. These inventory costing methods can be used in both types of inventory systems. The difference between the two systems is how often inventory quantities are updated, not the costing method used.
Similar Questions
Which statement is true?Multiple choice question.Specific identification, weighted average cost, LIFO and FIFO are acceptable GAAP costing methods.The inventory costing methods reflect the amount paid for the purchases of inventory.The inventory costing methods must mirror the physical flow of goods.
There are advantages to using each of the four inventory costing methods. Identify the statements below that are correct regarding these advantages. (Check all that apply.)Multiple select question.FIFO assigns an amount to cost of goods sold on the income statement that approximates its current replacement cost.FIFO assigns an amount to inventory on the balance sheet that approximates its current cost.Weighted average tends to smooth out erratic changes in costs.LIFO mimics the actual flow of goods for most businesse
Of the three widely used inventory costing methods (FIFO, LIFO, and average cost), the LIFO method of costing inventory assumes costs are charged based on the most recent purchases first.Question 7Select one:TrueFalse
FIFO, LIFO, and weighted average inventory costing methods are based on ______.Multiple choice question.the actual physical flow of goods purchased and sold by a businesssurveys taken that ask real companies how they value their inventoriesthe accounting equation: assets = liabilities + stockholders' equityassumptions that accountants make about the flow of inventory costs
Which of the following methods are available for costing inventory? (Select all that apply.)Multiple select question.Simple-averageWeighted-averageNIFOSpecific identificationLIFOFIFO
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.