Topic discuss the factors affecting a companys choice

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Exploring Economics
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Chapter 23 / Exercise 24
Exploring Economics
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Topic: Discuss the factors affecting a company's choice of inventory method
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Exploring Economics
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Chapter 23 / Exercise 24
Exploring Economics
Sexton
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12.Unit LIFO is more costly to implement than dollar-value LIFO. TRUEAACSB: Reflective ThinkingAICPA BB: Critical ThinkingBlooms: RememberDifficulty: 1 EasyLearning Objective: 08-08 Determine ending inventory using the dollar-value LIFO inventory method.Topic: Determine ending inventory using dollar-value LIFO inventory method13.LIFO liquidation profits occur when inventory quantity declines and costs are rising. TRUEAACSB: Reflective ThinkingAICPA BB: Critical ThinkingBlooms: RememberDifficulty: 1 EasyLearning Objective: 08-06 Understand supplemental LIFO disclosures and the effect of LIFO liquidations on net income.Topic: Discuss the factors affecting a company's choice of inventory method14.The gross profit ratio is calculated by dividing gross profit by average inventory. FALSEAACSB: Reflective ThinkingAICPA BB: Critical ThinkingBlooms: RememberDifficulty: 1 EasyLearning Objective: 08-07 Calculate the key ratios used by analysts to monitor a company's investment in inventories.Topic: Calculate the key ratios used by analysts to monitor a company's investment in inventories
15.Dollar-value LIFO eliminates the risk of LIFO liquidations. FALSEAACSB: Reflective ThinkingAICPA BB: Critical ThinkingBlooms: RememberDifficulty: 1 EasyLearning Objective: 08-08 Determine ending inventory using the dollar-value LIFO inventory method.Topic: Determine ending inventory using dollar-value LIFO inventory method16.A company that prepares its financial statements according to International Financial Reporting Standards can use all of the same inventory valuation methods as a company that prepares its statements under U.S. GAAP. FALSEAACSB: DiversityAACSB: Reflective ThinkingAICPA BB: GlobalBlooms: RememberDifficulty: 1 EasyLearning Objective: 08-09 Discuss the primary difference between U.S. GAAP and IFRS with respect to determining the cost of inventory.Topic: Discuss the primary difference between U.S. GAAP and IFRS with respect to determining the cost of inventoryMultiple Choice Questions
17.In a perpetual inventory system, the cost of purchases is debited to: A. Purchases.B. Cost of goods sold.C. Inventory.D. Accounts payable.AACSB: Reflective ThinkingAICPA BB: Critical ThinkingBlooms: RememberDifficulty: 1 EasyLearning Objective: 08-01 Explain the difference between a perpetual inventory system and a periodic inventory system.Topic: Explain the difference between a perpetual and periodic inventory system18.In a periodic inventory system, the cost of purchases is debited to: A. Purchases.B. Cost of goods sold.C. Inventory.D. Accounts payable.AACSB: Reflective ThinkingAICPA BB: Critical ThinkingBlooms: RememberDifficulty: 1 EasyLearning Objective: 08-01 Explain the difference between a perpetual inventory system and a periodic inventory system.

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