Which of the Following Statements Is Correct

question 101

Multiple Choice

Which of the following statements is correct?

• A)The choice of an inventory costing method is dependent upon the actual physical flow of the goods in inventory.
• B)LIFO should be used during a period of increasing unit costs when the objective is to maximize the ending inventory value on the balance sheet.
• C)FIFO should be used during a period of decreasing unit costs when the objective is to maximize the gross profit reported on the balance sheet.
• D)The average cost method will result in an ending inventory balance which is somewhere between LIFO and FIFO when inventory unit costs are changing.

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