Which of the following is an advantage of using LIFO in a period of rising costs?Multiple ChoiceResults in higher reported profitResults in lower cost of goods soldResults in higher ending inventoryResults in lower taxes

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

Which is the best descirbe of the effect of using different inventory method during of the period of rising price, a Using the Last-In, First-Out (LIFO) method will result in higher ending inventory and higher cost of goods sold, thereby showing higher gross profit compared to the First-In, First-Out (FIFO) method. b Using the First-In, First-Out (FIFO) method will result in lower ending inventory and higher cost of goods sold, thereby showing lower gross profit compared to the Last-In, First-Out (LIFO) method. c Using the First-In, First-Out (FIFO) method will result in higher ending inventory and lower cost of goods sold, thereby showing higher gross profit compared to the Last-In, First-Out (LIFO) method. d Using the Weighted Average Cost (WAC) method will always yield the same ending inventory and cost of goods sold figures irrespective of whether prices are rising or falling.

Various inventory methods including FIFO, LIFO, and average cost provide a process to identify raw materials, work-in-process, and finished goods. Discuss the benefits of using one method verses the other and their effect on the income statement. Does a company decide, based on taxes, which method to use or are there other determinants that are more important in your opinion? Provide details explaining your opinion in your discussion.

Risen, Inc. has a beginning inventory of $16 which consists of 2 units at $8 each. It purchased 10 units at $10 each. It sold 5 units for $20 each. Which would result in the higher Gross Profit, FIFO, or LIFO and why?Multiple choice question.FIFO because the newer, more expensive units are assumed to be sold first making cost of goods sold and gross profit higher than LIFOFIFO because the older, less expensive units are assumed to be sold first making Cost of Goods Sold lower and Gross Profit higher than LIFOLIFO because the newer, more expensive units are assumed to be sold first making cost of goods sold and gross profit higher than LIFOLIFO because the older, less expensive units are assumed to be sold first making cost of goods sold lower and gross profit higher than LIFO

Assuming purchase costs are rising in a periodic inventory system, determine which of the statements below are correct regarding the cost of goods sold under FIFO, LIFO and weighted average cost flow methods.Multiple select question.Companies using FIFO will report the highest gross profit and net income.Companies using FIFO will pay higher taxes than companies using LIFO, assuming all else being equal.Weighted average cost of goods sold will be between FIFO and LIFO costs of goods sold.Companies using LIFO will report the smallest cost of goods sold.