When Inventory Costs Are Declining, Which of the Following Inventory

question 105

Multiple Choice

When inventory costs are declining, which of the following inventory costing method will result in the lowest ending merchandise inventory?

• A)First-in, first-out
• B)Last-in, first-out
• C)Weighted-average
• D)Specific identification

---

Definitions:

Par Value

A legal amount per share established by a company's charter, not necessarily related to market value, often used for accounting purposes.

Zero-Coupon Bond

A debt security that does not pay interest (coupon) but is traded at a deep discount, rendering profit at maturity when the bond is redeemed for its face value.

Yield to Maturity

The total return anticipated on a bond if held until it matures, considering all payments of interest and principal and the time value of money.

Par Value

The face value of a bond or stock, typically the value printed on the certificate, which does not necessarily reflect its market value.