Which of the Following Statements Is Correct

question 119

Multiple Choice

Which of the following statements is correct?

• A)The choice of an inventory costing method is dependent upon the actual physical flow of the goods in inventory.
• B)LIFO should be used during a period of increasing unit costs when the objective is to maximize the ending inventory value on the balance sheet.
• C)FIFO should be used during a period of decreasing unit costs when the objective is to maximize the gross profit reported on the income statement.
• D)The average cost method will result in an ending inventory balance which is somewhere between LIFO and FIFO when inventory unit costs are changing.

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Definitions:

Physical

Relating to the body as opposed to the mind, or relating to material things.

Social

Relating to society or its organization, emphasizing the interaction and relationships of individuals within a community.

Psychiatrist

A medical doctor specialized in diagnosing, preventing, and treating mental illnesses.

Mind

The aspect of intellect and consciousness experienced as combinations of thought, perception, memory, emotion, will, and imagination, including all unconscious cognitive processes.