Under Which of the Following Conditions Will the FIFO Method

question 27

Multiple Choice

Under which of the following conditions will the FIFO method of process costing result in the same amount of cost being transferred to the next department as the weighted-average method?

• A)When the beginning and ending inventories are each fifty percent complete.
• B)When there is no beginning inventory.
• C)When there is no ending inventory.
• D)When units in the beginning inventory are all completed and transferred at the same time.

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Definitions:

Lower-Of-Cost

An accounting method that values inventory at the lower of its historical cost or current market value.

Market Basis

Market Basis refers to the approach of valuing assets or securities at their current market prices instead of their cost prices or intrinsic values.

Inventory Valuation

The process of determining the monetary amount associated with the inventory at hand, often using methods such as FIFO, LIFO, or weighted average cost.

Market Decline

A decrease in stock prices or the value of a particular market segment, often signaling a period of investor pessimism or economic downturn.