Which of the Following Statements Is Correct When Inventory Unit

question 7

Multiple Choice

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

• A)LIFO's ending inventory will be the largest among the inventory costing methods.
• B)FIFO's gross profit will be the lowest among the inventory costing methods.
• C)Inventory turnover will be the largest when the LIFO inventory method is used.
• D)Use of the LIFO method will result in lower cash flows due to an increased cost of goods solD.LIFO has the largest cost of goods sold and the lowest ending inventory and therefore the largest inventory turnover ratio.

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Definitions:

ΣX / N

The formula for calculating the mean of a set of data, where ΣX is the sum of all data points and N is the number of data points.

Arithmetic Average

Another term for the mean, calculated as the sum of all values divided by the number of values.

Frequency Value

The count of how many times a specific data point or value appears within a dataset.

Central Tendency

A measure that represents the center or typical value of a dataset, which includes the mean, median, and mode.