In a Period of Rising Costs,the First-In,first-Out (FIFO)method Results in Lower

question 18

True/False

In a period of rising costs,the first-in,first-out (FIFO)method results in lower cost of goods sold and higher gross profit than the last-in,first-out (LIFO)method.

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Definitions:

Retail Inventory Method

The retail inventory method is an accounting practice that estimates the ending inventory balance of a retailer by using the cost to retail price ratio.

Physical Count

The process of manually counting inventory items to verify quantities and ensure the accuracy of records.

Most Current Prices

Refers to the latest available prices of goods, services, or assets, often used in the evaluation of market trends or valuation assessments.

Ending Inventory

The total value or quantity of goods available for sale at the end of an accounting period, calculated by adding any purchases to the beginning inventory and subtracting sold goods.