At a Time of Declining Prices,which Cost Flow Assumption Will

question 78

Multiple Choice

At a time of declining prices,which cost flow assumption will result in the highest ending inventory?

• A)Weighted average
• B)FIFO
• C)LIFO
• D)Either weighted average or FIFO

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Definitions:

Natural Business Year

A fiscal year that ends when a business’s activities are at their lowest point in its annual cycle, typically determined by the nature of the business.

Fiscal Year

A one-year period that companies and governments use for financial reporting and budgeting, which doesn't necessarily coincide with the calendar year.

Fiscal Year

A one-year period that companies and governments use for accounting purposes and preparation of financial statements, which may not align with the calendar year.

December 31

The last day of the year, often used as a cut-off date for annual financial reports and assessments.