Two Companies Report the Same Cost of Goods Available for Sale

question 72

Multiple Choice

Two companies report the same cost of goods available for sale but each employs a different inventory cost formula.If the price of goods has increased during the period, then the company using

• A)FIFO will report lower ending inventory.
• B)Average cost will report lower ending inventory.
• C)FIFO will report higher cost of goods sold.
• D)Average cost will report lower cost of goods sold.

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Definitions:

Anterior Pituitary

The front portion of the pituitary gland, which secretes hormones that regulate a wide range of bodily functions, including growth, reproduction, and metabolism.

Prolactin

A hormone produced by the anterior pituitary gland that stimulates milk production after childbirth.

Last Trimester

The final third of a pregnancy, typically encompassing weeks 28 through 40, characterized by significant growth and development of the fetus.

Placenta

An organ that develops during pregnancy, providing oxygen and nutrients to the growing fetus while removing waste.