Which of the Following Statements Is Correct

question 29

Multiple Choice

Which of the following statements is correct?

• A)The choice of an inventory costing method is dependent upon the actual physical flow of the inventory.
• B)LIFO should be used during a period of increasing prices when the objective is to maximize the ending inventory value on the balance sheet.
• C)FIFO should be used during a period of decreasing prices when the objective is to maximize the gross profit reported on the balance sheet.
• D)The average cost method will result in an ending inventory balance which is somewhere between LIFO and FIFO when inventory prices are changing.

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Definitions:

Reconstituted Medications

Medicines that are in powder form and need to be mixed with a liquid before being administered.

Shelf Life

The length of time for which an item remains usable, fit for consumption, or saleable.

Ampicillin Sodium

A sodium salt form of ampicillin, a broad-spectrum penicillin antibiotic used to treat various bacterial infections.

Reconstitution

The process of adding a diluent to a dried or concentrated substance to make it into a liquid form suitable for injection or ingestion.