Match the Inventory Valuation Method from the List Below That

question 37

Short Answer

Match the inventory valuation method from the list below that is being described in each situation in letters a-e. In all cases, assume a period of rising prices.
$$\begin{array} { | l | l | } \hline \text { FIFO } & \text { First in, first out } \\\hline \text { LIFO } & \text { Last in, first out } \\\hline \text { WA } & \text { Weighted average } \\\hline \text { SI } & \text { Specific identification } \\\hline\end{array}$$ a. The method that is used if each inventory item can be matched with a specific purchase and invoice.
________ b. The method that will cause the company to have the lowest income taxes.
________ c. The method that will cause the company to have the lowest cost of goods sold.
________ d. The method that will assign a value to inventory that approximates current cost.
________ e. The method that will tend to smooth out erratic changes in costs.

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Definitions:

Present Value

The current-day worth of an anticipated future money amount or cash flow sequences, calculated using a particular rate of return.

Received

Refers to any amount of money received by a party or business, usually in the context of payments for goods or services.

Annually

Pertaining to an event or activity that occurs once every year.

New Home Prices

The selling prices of newly constructed homes currently on the market.