If the Unit Price of Inventory Is Increasing During a Period

question 19

True/False

If the unit price of inventory is increasing during a period, a company using the average-cost inventory method will show less gross profit for the period, than if it had used the FIFO inventory method.

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Definitions:

COUNTIF

A function in spreadsheet applications that counts the number of cells within a range that meet a specified condition.

AVERAGEIF

An Excel function that calculates the average of all numbers in a range that meet specified criteria.

Financial Functions

Specific mathematical formulas used in spreadsheets or financial software to perform calculations related to finance, such as interest rates, payments, and investment returns.

FV

Future Value, a finance function that calculates the future value of an investment based on a constant interest rate and fixed payments over time.