Market Analysis of Big Bazar

MCQ -1

– Financial Accounting
Under the FIFO cost flow assumption during a period of inflation, which of the following is false? WHICH OF THE FOLLOWING IS NOT TRUE. (Hint: One way to answer this is to look at examples of lifo and fifo).
Choose one answer.

a. Income tax expense will be higher than under LIFO.

b. Gross margin will be higher than under LIFO.

c. Ending inventory will be lower than under LIFO.

d. Cost of goods sold will be lower than under LIFO.

e. All of the above are true.

2
Marks: 1
Yoakum Company reported the following information related to inventory and sales Units
Unit Cost
Beginning inventory
1,000
$20
Purchase No. 1
7,000
22
Purchase No. 2
2,000
23
Sales — 7,000 units at $38 per unit.
Compute the following amounts assuming a periodic inventory
Inventory Costing Method
Revenue
Cost of Goods Sold
Gross Margin
Balance Sheet Inventory
FIFO
7000 X 38

LIFO

Answer:

3
Marks: 1
Inventory Costing Method
Revenue
Cost of Goods Sold
Gross Margin
Balance Sheet Inventory
FIFO

(1000 X 20) + (6000 X 22)

LIFO

Answer:

4
Marks: 1
Inventory Costing Method
Revenue
Cost of Goods Sold
Gross Margin
Balance Sheet Inventory
FIFO

266000 - 152000 LIFO

Answer:

5
Marks: 1
Inventory Costing Method
Revenue
Cost of Goods Sold
Gross Margin
Balance Sheet Inventory
FIFO

(1000 X 22) + (2000 X 23)
LIFO

Answer:

6
Marks: 1
Inventory Costing Method
Revenue
Cost of Goods Sold
Gross Margin
Balance Sheet Inventory
FIFO

LIFO 7000 X 38

Answer:

7
Marks: 1
Inventory Costing Method
Revenue
Cost of Goods Sold
Gross Margin
Balance Sheet Inventory
FIFO

LIFO (2000 X 23) + (5000 X 22)

Answer:

8
Marks: 1
Inventory Costing Method
Revenue
Cost of Goods Sold
Gross Margin
Balance Sheet