Which Inventory Costing Method Uses the Oldest Cost for Cost

question 23

Multiple Choice

Which inventory costing method uses the oldest cost for cost of goods sold on the income statement and the newest cost for inventory on the balance sheet?

• A)LIFO
• B)Specific identification
• C)FIFO
• D)Weighted average

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Definitions:

Deferred Intra-entity Gross Profits

Profits resulting from intra-entity transactions that are not immediately recognized for accounting purposes but deferred to future periods.

Separate Income Tax Returns

Tax documents filed by individuals or entities separately, as opposed to joint or consolidated filings.

Separate Return Method

A tax filing strategy used by businesses operating in multiple states or countries, where each entity files its own tax return rather than a consolidated return for the entire group.

Income Tax Expense

The total amount of income tax owed to federal, state, and local tax authorities for the period.