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Chapter 17 - Merchandise Inventory
Chapter 17
Merchandise Inventory
1. In a period of rising prices, the LIFO method of inventory valuation results in a lower
reported net income than the FIFO method.
2. The FIFO method of inventory valuation focuses on the balance sheet; the most current
costs are in ending inventory.
17-6
18. A price reduction below the original markon is ________________.
19. The ________________ method of inventory costing must be used for financial
accounting purposes if it is chosen for federal income tax purposes.
20. The price the business would have to pay to buy an item of inventory through usual
channels in usual quantities is either market price or __________________ cost.
