Which of the Following Inventory Costing Methods Results in the Lowest

question 138

Multiple Choice

Which of the following inventory costing methods results in the lowest value of ending inventory during a period of rising inventory costs?

• A) specific identification
• B) weighted-average
• C) last-in, first-out
• D) first-in, first-out

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Definitions:

Prepaid Insurance

An asset account that represents insurance premiums paid in advance, covering future periods.

Premiums Paid

Amounts paid for insurance coverage or policies over a specified period.

Unexpired Insurance

The portion of an insurance premium that has not yet been used up or has not yet expired, representing a future economic benefit.

Insurance Policy

A contract between an insurer and a policyholder in which the insurer agrees to compensate the policyholder for specific losses in exchange for a premium.