chapter6b - Chapter 6b 1 Manufacturing companies usually...

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Chapter 6b 1. Manufacturing companies usually classify inventory into three categories. A. True B. False 2. When the terms of sale are FOB shipping point, ownership of the goods remains with the seller until the goods reach the buyer. A. True B. False 3. There is an accounting requirement that the cost flow assumption be consistent with the physical movement of the goods. A. True B. False 4. The FIFO method assumes that the earliest goods purchased are the first to be sold. A. True B. False 5. Under LIFO, companies obtain the cost of the ending inventory by taking the cost of the latest goods available for the sale and working backward until all the units have been costed. 6. Some argue that the use of FIFO in a period of inflation enables a company to avoid reporting paper (phantom) profit as economic gain. A. True B. False
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