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:

Theorem

A proven statement or proposition that is derived based on previously established statements, such as other theorems, and generally accepted mathematical operations.

Research Hypothesis

A statement predicting a relationship between variables that is tested through research.

Null Hypothesis

A foundational assumption stating there is no meaningful variance or impact, serving as the initial basis for statistical analysis.

Theorem

A statement that has been proven on the basis of previously established statements, such as other theorems, and generally accepted principles, like axioms.