Accounting homework True or False

Posted on 2014-03-28 10:28:00 in Accounting by MACY

During periods of decreasing costs the use of the LIFO method of costing inventory will result in a lower amount of net income than would result from the use of the FIFO method.

(True or False)



During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $225,201.00 instead of the correct amount of $161,043.00. What would be the effect on the balance sheet and income statement?

Select the correct answer.



A. assets overstated by $64,158.00 retained earnings understated by $64,158.00 net income statement understated by $64,158.00.

B. assets overstated by $225,201.00 retained earnings understated by $161,043.00 no effect on the income statement.

C.assets and retained earnings overstated by $64,158.00 net income overstated by $64,158.00.

D. assets and retained earnings overstated by $161,043.00 net income understated by $225,201.00.

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