Which of the Following Statements Is Correct with Respect to Inventories

question 55

Multiple Choice

Which of the following statements is correct with respect to inventories?

• A) The FIFO cost formula assumes that the costs of the earliest goods acquired are the last to be sold.
• B) It is generally good business management to sell the most recently acquired goods first.
• C) Under FIFO, the ending inventory is based on the latest units purchased.
• D) FIFO seldom coincides with the actual physical flow of inventory.

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Definitions:

Emission Standards

Regulations set by governments to limit the amount of pollutants that can be emitted into the environment by automobiles, factories, and other sources.

Quantity Supplied

The quantity of a product or service that suppliers are ready and capable of offering for sale at a specific price point.

Supply Curve

A graphical representation of the relationship between the price of a good or service and the quantity supplied for a given period.

Technology

The application of scientific knowledge for practical purposes, especially in industry and in the creation of inventions and software.