Which Inventory Method Generally Results in the Most Realistic Balance

question 90

Multiple Choice

Which inventory method generally results in the most realistic balance sheet valuation?

• A)FIFO
• B)Specific identification
• C)LIFO
• D)Average-cost

---

Definitions:

Debits And Credits

The two fundamental aspects of every financial transaction in double-entry bookkeeping, where debits must equal credits.

Trial Balance

A trial balance is a bookkeeping report showing the balances of all ledgers accounts to ensure that debits equal credits.

Double-Entry System

An accounting technique that records each transaction as both a debit and a credit in different accounts, ensuring the accounting equation remains balanced.

Transaction

Any event or activity that affects the financial position of a company and can be measured reliably in monetary terms.