1. Assuming falling prices, which method will give the highest dollar value for cost of goods sold on the income statement?

   1. LIFO

   2. FIFO

   3. Average Cost

   4. All them give equal values for cost of goods sold

2. BBC Company purchased a truck for $48,000 on March 1. Expected useful life for the truck is 4 years and residual value is 0. If financial statements are to be prepared on December 31, the company should make the following adjusting entry:

   1. Debit Depreciation Expense, $10,000; Credit Accumulated Depreciation, $10,000

   2. Debit Property, Plant and Equipment, $12,000; Credit Accumulated Depreciation, $12,000

   3. Debit Depreciation Expense, $12,000; Credit Accumulated Depreciation, $12,000

   4. Debit Depreciation Expense, $4,000; Credit Accumulated Depreciation, $4,000