Multiple Choice
Janine is a sole proprietor owning a small specialty store.The business records show that the cost of the store's individual inventory items has been steadily increasing.The cost of the end of the year inventory is $125,000 and the cost of the beginning of the year inventory was $150,000.Janine uses the LIFO method of inventory valuation.Which of the following statements is true?
A) Janine purchased more inventory during the year than she sold during the same one-year period.
B) Janine would have a higher net income if she used the FIFO method of inventory valuation instead of the LIFO method.
C) Janine has apparently increased the volume of items in her ending inventory as compared to the number of items in her beginning inventory.
D) Since the cost of the store's inventory items is increasing, Janine will have a smaller cost of goods sold amount on a LIFO basis than on a FIFO basis.
E) None of the above.
Correct Answer:
Verified
Correct Answer:
Verified
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