Two companies report the same cost of goods available for sale but each employs a different inventory costing method.If the price of goods has increased during the period, then the company using

Question

Quizplus · Accepted Answer

Under FIFO, the cost of goods sold is based on the oldest inventory first. Therefore, as the price of goods has increased during the period, the cost of goods sold will be lower because the cost of the oldest inventory is lower. This results in a higher ending inventory. Therefore, choice C is correct. Choices A, B, and D are incorrect as they do not match the expected outcome.

Two Companies Report the Same Cost of Goods Available for Sale