1. FIFO uses the ______ cost for cost of goods sold on the income statement and the ______ cost for inventory on the balance sheet.

newest; newest

newest; oldest

oldest; oldest 

oldest; newest

2. Which inventory costing method uses the oldest cost for cost of goods sold on the income statement and the newest cost for inventory on the balance sheet?

LIFO

Specific identification

FIFO

Weighted average

3. LIFO uses the ______ unit costs for cost of goods sold on the income statement and the ______ unit costs for inventory on the balance sheet.

newest; oldest

oldest; oldest

oldest; newest

newest; newest

4. If inventory is updated periodically, which of the equations is correct?

Cost of goods sold = Beginning inventory + Purchases − Ending inventory

Cost of goods sold = Beginning inventory + Purchases + Ending inventory

Beginning inventory + Purchases = Ending inventory

Ending inventory = Beginning inventory + Purchases + Cost of goods sold

5. If inventory is updated perpetually, which of the equations is correct?

Cost of goods sold = Beginning inventory − Purchases − Ending inventory

Cost of goods sold = Beginning inventory + Purchases + Ending inventory

Ending inventory = Beginning inventory + Purchases − Cost of goods sold

Ending inventory = Beginning inventory + Purchases + Cost of goods sold

6. Goods available for sale equals:

Cost of Goods Sold plus ending inventory.

Cost of Goods Sold minus ending inventory.

Beginning inventory plus Cost of Goods Sold.

Beginning inventory plus Purchases minus Cost of Goods Sold.

7. Assume a periodic inventory system is used. Which inventory costing method generally results in the most recent costs being assigned to ending inventory?

LIFO

FIFO

Weighted average cost

Simple average cost