Matching
Match the statements below with the appropriate cost flow method.Some methods may be used more than once,and others may not be used at all.
Premises:
is difficult to apply when the inventory items are identical
results in the highest ending inventory value in a period of falling prices
results in the lowest net income in a period of rising inventory purchase costs
results in the highest net income in a period of rising inventory purchase costs
matches the costs of the most recently purchased items with sales on the income statement
Responses:
S = Specific identification method
W = Weighted average method
F = FIFO
L = LIFO
Correct Answer:
Premises:
Responses:
is difficult to apply when the inventory items are identical
results in the highest ending inventory value in a period of falling prices
results in the lowest net income in a period of rising inventory purchase costs
results in the highest net income in a period of rising inventory purchase costs
matches the costs of the most recently purchased items with sales on the income statement
Premises:
is difficult to apply when the inventory items are identical
results in the highest ending inventory value in a period of falling prices
results in the lowest net income in a period of rising inventory purchase costs
results in the highest net income in a period of rising inventory purchase costs
matches the costs of the most recently purchased items with sales on the income statement
Responses:
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