chapter 6

chapter 6 - goods purchased remain in inventory, which...

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John Rubinetti Professor Kravet Financial Accounting 11/2/2007 Chapter 7 | Questions 11, 12 11. (a) The FIFO usually parallels the actual physical flow merchandise. (b) The average cost assumes that goods are available for sale during an accounting period are similar in nature (c) The LIFO assumes that the latest units purchased are the first to be sold 12. The cost flow method being used by Alpha Company is the FIFO method of inventory costing. The Omega Company is using the LIFO method of cost flow. Under the FIFO, the latest
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Unformatted text preview: goods purchased remain in inventory, which causes the inventory on the balance sheet to be close to current costs. The opposite is true of the LIFO method. The company that will probably have the higher gross profit between the two will be the Alpha Company because the cost of goods sold will have a higher number of goods purchased at lower costs earlier on....
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This note was uploaded on 04/29/2008 for the course AC 11 taught by Professor Kravet during the Fall '07 term at Fairfield.

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