Ace Company Is a Retailer Operating in an Industry That

question 89

Multiple Choice

Ace Company is a retailer operating in an industry that experiences inflation (rising prices) . Ace wants the most realistic net income. Which inventory costing method should Ace consider using?

• A)Average because all inventory costs will then represent an average amount.
• B)Specific identification is the most realistic method because it involves the actual costs.
• C)LIFO because cost of goods sold represents the latest costs.
• D)FIFO because cost of goods sold represents the earliest costs.

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Definitions:

Raw Materials

Basic substances or inputs that are essential for the production process or are used to create a final product.

Physique

The form, size, and development of a person's body.

Uniqueness

The quality of being one of a kind or unlike anything else, often valued in individuals for contributing to diversity and personal identity.

Id

The id is part of Freud's psychoanalytic theory, representing the instinctual, unconscious part of the psyche driving basic impulses such as seeking pleasure.