Assuming Inflation,which of the Following Relationships Among Inventory Valuation Methods

question 8

Multiple Choice

Assuming inflation,which of the following relationships among inventory valuation methods is incorrectly stated?

• A)FIFO has a higher ending inventory balance and a higher net income than LIFO.
• B)FIFO has a higher ending inventory balance and a higher net income than weighted-average.
• C)LIFO has a higher ending inventory balance and a higher net income than weighted-average.
• D)Weighted-average has a higher ending inventory balance and a lower cost of goods sold than LIFO.
• E)LIFO has a lower ending inventory balance and a higher cost of goods sold than FIFO.

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Definitions:

Budget Deficit

The financial situation where a government's expenditures exceed its revenue over a specified period, leading to borrowing or the use of reserves.

Exchange Rates

The price of one currency expressed in terms of another, determining how much foreign currency can be obtained with a unit of domestic currency.

Transaction Categories

Transaction categories are classifications of financial transactions based on their nature, such as income, expenses, transfers, and investments, to help in managing finance.

Domestic Investors

Individuals or entities within a country that allocate their own funds or capital into domestic investments such as stocks, bonds, and real estate.