Which of the Following Statements About the Moving Average Cost

question 17

Multiple Choice

Which of the following statements about the moving average cost assumption is true?

• A)If prices are rising companies prefer it because it lowers their tax liability.
• B)It is the most popular method in Canada.
• C)In times of rising prices moving average will produce a higher net income than FIFO.
• D)In time of rising prices moving average produces an inventory cost per unit that is higher than the cost per unit of cost of goods sold.

---

Definitions:

Interstate Highway

A network of controlled-access highways that form part of the National Highway System in the United States.

Public School

An educational institution funded and operated by the government, providing free education to students.

Net Taxes

The difference between total taxes collected by the government and the total transfer payments and non-tax revenues it provides.

Transfer Payments

Payments made by governments to individuals without the expectation of any goods or services in return, such as welfare or social security payments.