1. TASK: Insert the appropriate word in the text below:
сheapest – cost - ending inventory - holding gains – revenues - rising prices
LIFO (Last In, First Out) is based on the principle that the last inventory goods received will be the first inventory goods sold. In periods of _________________, LIFO will result in the lowest _________________, the highest cost of goods sold, and the lowest net income. _________________ is smaller because the newest and highest prices are sold first, leaving the oldest and _________________ inventory on the books.
_________________ of goods sold is high because the newest and most expensive inventory is sold first. Net income is the lowest because _________________ are matched with the highest inventory costs. LIFO eliminates _________________ because we are selling inventory with the newest cost.
2. CHECK YOUR SPEAKING
|
cheapest |
[ ˈʧiːpɪst ] |
найдешевший |
|
cost |
[ kɒst ] |
вартість |
|
ending inventory |
[ ˈɛndɪŋ ˈɪnvəntri ] |
кінцеві запаси |
|
holding gains |
[ ˈhəʊldɪŋ geɪnz ] |
внутрішні прибутки |
|
revenues |
[ ˈrɛvɪnjuːz ] |
надходження |
|
rising prices |
[ ˈraɪzɪŋ ˈpraɪsɪz ] |
зростаючі ціни |
3. SEE CORRECT ANSWER
LIFO (Last In, First Out) is based on the principle that the last inventory goods received will be the first inventory goods sold. In periods of rising prices, LIFO will result in the lowest ending inventory, the highest cost of goods sold, and the lowest net income. Ending inventory is smaller because the newest and highest prices are sold first, leaving the oldest and cheapest inventory on the books.
Cost of goods sold is high because the newest and most expensive inventory is sold first. Net income is the lowest because revenues are matched with the highest inventory costs. LIFO eliminates holding gains because we are selling inventory with the newest cost.
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