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ETS MFT Business Exam Version 2 Newest 2025/ 2026
Complete All Questions And Correct Detailed Answers
(Verified Answers) With Rationales |Already Graded
A+||Newest Verified Version!!!
In a period of rising prices, which inventory valuation
method would generally yield both the lowest ending
inventory value and net income figure?
a. FIFO (First In, First Out)
b. LIFO (Last In, First Out)
c. Weighted Average
d. Standard Cost - ANSWER-b. LIFO
(method used to account for inventory. cost of the most
recent products purchased (or produced) are the first to be
expensed as cost of goods sold (COGS), which means the
lower cost of older products will be reported as inventory)
___________ is an asset-management and valuation
method in which assets produced or acquired first are
sold, used, or disposed of first. Also, provides a better
indication of the value of ending inventory (on the balance
sheet), but it also increases net income because inventory
that might be several years old is used to value COGS.
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Increasing net income sounds good, but it can increase
the taxes that a company must pay.
a. FIFO (First In, First Out)
b. LIFO (Last In, First Out)
c. Weighted Average
d. Standard Cost - ANSWER-a. FIFO
____________not a good indicator of ending inventory
value because it may understate the value of inventory.
__________ results in lower net income (and taxes)
because COGS is higher. However, there are fewer
inventory write-downs under _________ during inflation.
a. FIFO (First In, First Out)
b. LIFO (Last In, First Out)
c. Average Costing/Weighted Average
d. Standard Cost - ANSWER-b. LIFO
________________ assigns a cost to inventory items
based on the total cost of goods purchased or produced in
a period divided by the total number of items purchased or
produced.
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a. FIFO (First In, First Out)
b. LIFO (Last In, First Out)
c. Average Costing/Weighted Average
d. Standard Cost - ANSWER-C. Average
Costing/Weighted Average
_______________ the practice of substituting an expected
cost for an actual cost in the accounting records.
Subsequently, variances are recorded to show the
difference between the expected and actual costs.
a. FIFO (First In, First Out)
b. LIFO (Last In, First Out)
c. Average Costing/Weighted Average
d. Standard Cost - ANSWER-d. Standard Costing
In the statement of cash flows, the section for cash flows
from operating activities will include which of the
following?
a. dividends paid
b. issuance of common stock
ETS MFT Business Exam Version 2 Newest 2025/ 2026
Complete All Questions And Correct Detailed Answers
(Verified Answers) With Rationales |Already Graded
A+||Newest Verified Version!!!
In a period of rising prices, which inventory valuation
method would generally yield both the lowest ending
inventory value and net income figure?
a. FIFO (First In, First Out)
b. LIFO (Last In, First Out)
c. Weighted Average
d. Standard Cost - ANSWER-b. LIFO
(method used to account for inventory. cost of the most
recent products purchased (or produced) are the first to be
expensed as cost of goods sold (COGS), which means the
lower cost of older products will be reported as inventory)
___________ is an asset-management and valuation
method in which assets produced or acquired first are
sold, used, or disposed of first. Also, provides a better
indication of the value of ending inventory (on the balance
sheet), but it also increases net income because inventory
that might be several years old is used to value COGS.
,2|Page
Increasing net income sounds good, but it can increase
the taxes that a company must pay.
a. FIFO (First In, First Out)
b. LIFO (Last In, First Out)
c. Weighted Average
d. Standard Cost - ANSWER-a. FIFO
____________not a good indicator of ending inventory
value because it may understate the value of inventory.
__________ results in lower net income (and taxes)
because COGS is higher. However, there are fewer
inventory write-downs under _________ during inflation.
a. FIFO (First In, First Out)
b. LIFO (Last In, First Out)
c. Average Costing/Weighted Average
d. Standard Cost - ANSWER-b. LIFO
________________ assigns a cost to inventory items
based on the total cost of goods purchased or produced in
a period divided by the total number of items purchased or
produced.
, 3|Page
a. FIFO (First In, First Out)
b. LIFO (Last In, First Out)
c. Average Costing/Weighted Average
d. Standard Cost - ANSWER-C. Average
Costing/Weighted Average
_______________ the practice of substituting an expected
cost for an actual cost in the accounting records.
Subsequently, variances are recorded to show the
difference between the expected and actual costs.
a. FIFO (First In, First Out)
b. LIFO (Last In, First Out)
c. Average Costing/Weighted Average
d. Standard Cost - ANSWER-d. Standard Costing
In the statement of cash flows, the section for cash flows
from operating activities will include which of the
following?
a. dividends paid
b. issuance of common stock
