Ace Company Is a Retailer Operating in an Industry That

question 120

Multiple Choice

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

• A)Average-cost 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 the cost of goods sold represents the latest costs.
• D)FIFO because the cost of goods sold represents the earliest costs.

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