Two Companies Report the Same Cost of Goods Available for Sale

question 32

Multiple Choice

Two companies report the same cost of goods available for sale but each employs a different inventory costing method.If the price of goods has increased during the period, then the company using

• A)LIFO will have the highest ending inventory.
• B)FIFO will have the highest cost of good sold.
• C)FIFO will have the highest ending inventory.
• D)LIFO will have the lowest cost of goods sold.

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Definitions:

Financial Statements

Documents that provide an overview of a company's financial condition, including the balance sheet, income statement, and cash flow statement.

Translating

The process of converting financial statements from one currency into another currency to provide comparability.

Subsidiary

A company that is completely or partly owned and partly or entirely controlled by another company.

Property, Plant & Equipment

This refers to tangible assets that are expected to be used in the production of goods or services and are not intended for sale in the ordinary course of business.