Which of the Following Inventory Valuation Methods Should Be Used

question 166

Multiple Choice

Which of the following inventory valuation methods should be used for unique items?

• A) first-in, first-out
• B) last-in, first-out
• C) weighted-average
• D) specific identification

---

Definitions:

Inventory Period

The typical duration required for a firm to convert its stock into revenue.

Accounts Receivable Turnover

A financial metric that measures how often a company collects its average accounts receivable balance in a period.

Accounts Payable Turnover

A financial ratio that measures the rate at which a company pays off its suppliers by dividing total purchases by average accounts payable for the period.

Cash Surplus

A situation where a business or individual's income exceeds its expenditures, resulting in available cash for saving or spending.