Question Details

In a period of falling prices, the average-cost method 


True or false 
1.	In a period of falling prices, the average-cost method results in a lower cost of goods sold than the FIFO method.

	2.	The lower-of-cost-or-net realizable value basis is an example of the accounting concept of prudence.

	3.	Inventories are reported in the current assets section of the statement of financial position immediately before receivables

4.	In a perpetual inventory system, the cost of goods sold under the FIFO method is based on the cost of the latest goods on hand during the period.

5.	The gross profit method is based on the assumption that the rate of gross profit remains constant from one year to the next.




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