When Inventory Costs Are Declining, Which of the Following Inventory

question 82

Multiple Choice

When inventory costs are declining, which of the following inventory costing methods will result in the highest cost of goods sold?

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

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Definitions:

Stated Rate

The interest rate declared on a financial instrument, such as a bond or loan, without adjusting for compounding or fees.

Compounded Annually

A method of calculating interest where the interest earned or paid is added to the principal, resulting in interest on interest in subsequent periods.

Effective Rate

The interest rate on a loan or financial product, adjusted for the effect of compounding over a given period.

Loan Proceeds

The amount of money that is disbursed to the borrower from the lender minus any fees or costs associated with the loan.