Accounting Procedures

Question

1. Accounting procedures allow a business to evaluate their inventory at LIFO (Last In First Out) or FIFO (First In First Out). A manufacturer evaluated its finished goods inventory (in $ thousands) for five products both ways. Based on the following results, is LIFO more effective in keeping the value of his inventory lower?

Product FIFO (F) FIFO(L)

1 225 221

2 119 100

3 100 113

4 212 200

5 248 245

This example is what type of test?

Answer 

One sample test of means.

Two sample test of means.

Paired   t-test.

Test of proportions.

2. Accounting procedures allow a business to evaluate their inventory at LIFO (Last In First Out) or FIFO (First In First Out). A manufacturer evaluated its finished goods inventory (in $ thousands) for five products both ways. Based on the following results, is LIFO more effective in keeping the value of his inventory lower?
Product FIFO (F) FIFO(L)

1 225 221

2 119 100

3 100 113

4 212 200

5 248 245

What is the value of calculated t?

Answer 

+0.93

±2.776

+0.47

-2.028

None of these.

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