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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Definitions:

Secondary Effects

Unintended consequences of economic actions, which may manifest in areas not directly targeted by the initial action.

Unintended Consequences

Outcomes that occur as a result of actions or policies that were not anticipated or intended by the actors involved.

Economic Change

Shifts in economic conditions, such as growth, recession, or structural adjustments, affecting markets and societies.

Free Lunch

An expression indicating that it is impossible to get something for nothing, underscoring the idea that every choice has a cost.