Swing Ltd uses FIFO for its inventory, which is valued at $21 000. It is considering a change to moving weighted average, which would change the valuation of inventory to $22 500. Which of the following would be decreased by the change?

Question

Quizplus · Accepted Answer

The change from FIFO to moving weighted average would result in a higher valuation of inventory and therefore a decrease in the cost of goods sold, as the cost per unit would be higher under moving weighted average. The change would not affect sales, liabilities, or retained profits.

Swing Ltd Uses FIFO for Its Inventory, Which Is Valued