Which of the Following Statements Is Correct

question 101

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 balance sheet.
• 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:

Temporal Factor

A variable related to time that influences outcomes, events, or processes, including duration, timing, and sequence.

Consumer Purchases

The action of acquiring goods or services for personal use or ownership by an individual.

Queuing

The process of forming a line or waiting in order to obtain services, goods, or entry to events, often governed by a first-come, first-served principle.

Social Dimension

An aspect that involves the interaction between individuals and societies, including social structures, practices, and norms.