Which of the following statements is correct for a company that uses the FIFO costing method under a perpetual inventory system? All else being equal
A)The value of the ending inventory would be higher under a periodic system.
B)The value of the ending inventory would be lower under a periodic system.
C)The value of the ending inventory would be the same under a periodic system.
D)The periodic system would not require any additional entries at the end of the period.

Question

Quizplus · Accepted Answer

Under a perpetual inventory system using the FIFO costing method, the value assigned to the ending inventory is based on the cost of the most recently acquired goods, which are assumed to be the first ones sold. This value does not change based on the frequency of inventory counts, so the value of the ending inventory would be the same under both periodic and perpetual systems.

Which of the Following Statements Is Correct for a Company