Which Inventory Cost Flow Assumption Will Provide the Same Amounts

question 97

Multiple Choice

Which inventory cost flow assumption will provide the same amounts for ending inventory and cost of goods sold under both the periodic and perpetual inventory systems?

• A) FIFO
• B) LIFO
• C) Average cost
• D) NIFO

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Definitions:

Dividends Account

An account in the ledger that records dividends paid out to shareholders by a company.

Retained Earnings Account

An equity account that represents the accumulated portion of net income not distributed to shareholders in the form of dividends.

Current Ratio

A financial liquidity metric that compares a company's current assets to its current liabilities, used to evaluate its ability to pay short-term obligations.

Temporary Accounts

Accounts that track revenues and expenses within a specific accounting period and are reset to zero at the period’s end.