Which of the Following Statements Is Incorrect

question 74

Multiple Choice

Which of the following statements is incorrect?

• A)A year-end purchase of inventory increases the LIFO cost of goods sold when prices are increasing and a periodic inventory system is used.
• B)A year-end purchase of inventory increases the FIFO ending inventory when prices are increasing and a periodic inventory system is used.
• C)The choice of an inventory costing method is dependent on the actual flow of goods when inventory is sold.
• D)A year-end purchase of inventory doesn't affect the weighted-average ending inventory when prices are increasing and a periodic inventory system is used.

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Definitions:

Activity-Based Costing

A costing methodology that identifies activities in an organization and assigns the cost of each activity to all products and services according to the actual consumption by each.

Assembly Activity Cost Pool

A grouping of all costs related to the assembly process in activity-based costing, used to allocate costs to products or services.

Labor-Hour

A measure of work accomplished, recorded, or billed based on the number of hours worked.

Activity-Based Costing

A method of allocating overhead and indirect costs to products or services based on the activities that drive those costs.