The Two Most Widely Used Methods for Determining the Cost

question 107

Multiple Choice

The two most widely used methods for determining the cost of inventory are

• A) FIFO and LIFO
• B) FIFO and average cost
• C) LIFO and average cost
• D) gross profit and average cost

---

Definitions:

Rationally Evaluating

The process of logically assessing something to form a judgment or conclusion.

Evidence

Reasons for believing that a statement or claim is true or probably true.

Confirmation Bias

The human tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.

Memorable Events Error

A cognitive bias that occurs when memorable or significant events are more easily recalled than ordinary events, skewing perception and decision-making.