1. When prices are falling, which inventory method generally produces a more accurate Ending Invento

FIFO

LIFO

Average Cost

2. Raw materials are not considered to be Inventory when they are first purchased; only after they are actually used in production.

True or False

3.In March 2012, X Corp. purchased an item of inventory for $400. By June, that item could be purchased for $360 and re-sold for $440. Xs normal profit for the item is $50. At what amount should X report the item in its June 30 balance sheet? X uses the LIFO inventory cost flow assumption. 4. X, Inc., uses the LIFO cost flow assumption. X had 100 items in its Jan. 1 beginning inventory balance, totaling $500 (that is, $5 each). X purchased another 200 items on Jan. 9 for $6 each. On Jan. 12 X sold 230 items for $10 each. By how much did this LIFO liquidation increase X's usual profit on a sale of 230 items?