Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 46

For the following questions, circle the best response.

Inventories

a. represent a major portion of the property, plant, and equipment assets for many firms.

b. are recorded as debits to assets when purchased and as debits to expenses when used.

c. must be accounted for using either the LIFO or FIFO method.

d. are not an important component of working capital for most firms.

e. decrease ROI because they use cash.