Which of the Following Statements Is Correct When Inventory Unit

question 80

Multiple Choice

Which of the following statements is correct when inventory unit costs are decreasing?

• A)FIFO's cost of goods sold will be the largest among the inventory costing methods.
• B)LIFO's income tax will be the lowest among the inventory costing methods.
• C)Ending inventory using the FIFO cost method will be higher than the ending inventory when the LIFO method is used.
• D)Cost of goods sold using the average cost method will be less than cost of goods sold when the LIFO method is useD.FIFO has the largest cost of goods sold during a period of decreasing unit costs.

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Definitions:

Feasibility Report

A study conducted to assess the practicality and potential success of a proposed project or system.

External Accounting

The process of handling financial records and reports for parties outside an organization, such as regulators or investors.

Informational Report

A document that provides facts, data, and insights on a specific topic, without analysis or recommendations.

Analysis

The process of examining data or information in order to understand it better, often to draw conclusions or make decisions.