When Prices Are Rising, the Cost of Goods Sold on the Income

question 4

Multiple Choice

When prices are rising, the cost of goods sold on the income statement reported on a weighted-average basis is generally:

• A)lower than on a FIFO basis.
• B)equal to ending inventory reported on a FIFO basis.
• C)greater than on a FIFO basis.
• D)equally likely to be higher or lower on a weighted-average basis as opposed to a FIFO basis.

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Definitions:

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