During Periods of Inflation, the Specific Identification Cost Flow Assumption

question 106

True/False

During periods of inflation, the specific identification cost flow assumption will yield a higher cost of goods sold than LIFO.

---

Definitions:

Overall Profitability

An assessment of a company's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time.

Company

A legal entity formed by a group of individuals to engage in and operate a business—commercial or industrial—enterprise.

Perpetual Inventory System

An inventory accounting technique that instantly logs the sale or acquisition of inventory using computerized point-of-sale systems and enterprise asset management software.

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the appropriate periods.