Which of the Following Statements Is Correct When Inventory Prices

question 122

Multiple Choice

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

• A)FIFO's cost of goods sold will be the largest among the inventory costing methods.
• B)LIFO's income tax will be the lowest among the inventory costing methods.
• C)Ending inventory using the average cost method will be greater than the ending inventory when the LIFO method is used.
• D)Cost of goods sold using the average cost method will be less than cost of goods sold when the LIFO method is used.

---

Definitions:

Risk Minimization

The process of identifying, assessing, and taking steps to reduce or eliminate risks to an organization.

Internal Validation

The process of reviewing and assessing the internal procedures, controls, and operations of an organization to ensure they are effective and in line with set standards or goals.

Supply Savings

The reduction in costs achieved through efficient supply management practices, including negotiation, strategic sourcing, and procurement efficiencies.

Market Changes

Refers to the fluctuations and transformations in the dynamics of a market, influenced by factors like consumer behavior, economic policies, and technological advancements.