2024 MGMT 200 Exam 2 Purdue University New
Exam Version with All Questions from Actual
Past Exams and Answers
LIFO is considered an income statement approach for reporting inventory because it:
A. Always results in a higher amount of net income being reported
B. Better approximates the value of ending inventory
C. Better approximates inventory cost necessary to generate revenue
D. Always results in a lower amount of net income being reported ---------- Correct
Answer --------- C. Better approximates inventory cost necessary to generate revenue
For most companies, actual physical flow of their inventory follows LIFO.
A. True
B. False ---------- Correct Answer --------- B. False (Most often, the actual physical flow of
goods follows FIFO)
All of the following are inventory costing methods except
A. last-in, last-out
B. average-cost
C. perpetual
D. specific identification ---------- Correct Answer --------- C. perpetual
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