Barry Company Purchased Two Identical Inventory Items

question 4

Multiple Choice

Barry Company purchased two identical inventory items. The item purchased first cost $7.00 and the item purchased second cost $9.00. Barney sold one of the items for $12.00. Which of the following statements is true?

• A) Ending inventory will be lower if Barney uses weighted average than it would be if FIFO were used.
• B) Cost of goods sold will be higher if Barney uses FIFO than it would be if weighted average were used.
• C) Ending inventory will be the same no matter which cost flow method is used.
• D) Gross margin will be higher if Barney uses LIFO than if FIFO were used.

---

Definitions:

Jamestown

The first permanent English settlement in North America, established in 1607 in present-day Virginia.

English Catholics

Members of the Catholic Church residing in England, who faced periods of persecution and discrimination, particularly after the English Reformation which established the Church of England.

Titled Aristocracy

A class of nobility in some countries who hold titles conferred by a monarch or other hereditary system, often with privileges and responsibilities.

Tenant Farmer

A farmer who rents land to cultivate it, rather than owning it, a common practice in agricultural societies throughout history.