During a Period of Increasing Cost Prices, Which Inventory Costing

question 105

Multiple Choice

During a period of increasing cost prices, which inventory costing method will yield the lowest cost of goods sold?

• A) Any method in which the company uses a periodic inventory system
• B) Weighted Average Cost
• C) LIFO
• D) FIFO

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Definitions:

Rate of Return

Rate of Return is the gain or loss of an investment over a specified period, expressed as a percentage of the investment's initial cost.

Investor

An individual or entity that commits capital with the expectation of receiving financial returns.

Economic Value

Refers to the value a good or service has in the context of its ability to generate income or utility.

Interest

The cost of borrowing money or the return on investments, usually expressed as a percentage of the amount lent, deposited, or invested.