Identify Which Inventory Costing Method (LIFO or FIFO) Achieves the Effect

question 186

Multiple Choice

Identify which inventory costing method (LIFO or FIFO) achieves the effect listed in the following items:
-Prices are rising; cost of goods sold is lower with this method.

• A)LIFO
• B)FIFO

---

Definitions:

Bonds Purchased

Bonds purchased refer to the acquisition of bond securities by an investor, representing loans to the issuer in return for periodic interest payments and the return of principal at maturity.

Accrued Interest

Interest that has been incurred but not yet paid, representing a liability for the borrower and an asset for the lender.

Semiannual Interest Payments

Interest payments made twice a year on a loan or bond.

Equity Method

An accounting technique used to record investments in other companies, reflecting the investor's share of the investee's profits or losses.