Which of the Following Statements Is Correct When Inventory Prices

question 6

Multiple Choice

Which of the following statements is correct when inventory prices are decreasing?

• A)Inventory turnover will be the greatest when the average cost inventory method is used.
• B)FIFO's gross profit will be the highest among the inventory costing methods.
• C)Inventory turnover will be the largest when the LIFO inventory method is used.
• D)Use of the LIFO method will result in lower cash flows due to a decreased cost of goods sold.

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Definitions:

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A characteristic of questions or issues that involve multiple aspects, which can confuse the responder or complicate the response.

Simplistic

Describes something that is overly simplified, lacking in complexity or nuance.

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