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Book Cover
Financial and Managerial Accounting: The Basis for Business Decisions, 12/e
Jan R. Williams, University of Tennessee
Susan F. Haka, Michigan State University
Mark S. Bettner, Bucknell University
Robert F. Meigs
Inventories and the Cost of Goods Sold

True/False Quiz

Please answer all questions



1

In a period of rising purchase costs, the FIFO flow assumption tends to minimize taxable income.
A)True
B)False
2

If a retailer uses the retail method, its inventory will appear in the balance sheet at its estimated cost, rather than its sales value.
A)True
B)False
3

The principal advantage of a just-in-time inventory system is that the risk of running out of inventory is substantially reduced.
A)True
B)False








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