An attribute associated with inventory valuation methods is that the lower the cost of goods sold the higher the ending inventory.

Question

Quizplus · Accepted Answer

This statement is true. Under inventory valuation methods such as FIFO and LIFO, a lower cost of goods sold will result in a higher ending inventory because the cost of goods sold is subtracted from the beginning inventory, and the remaining value is the ending inventory. Therefore, a lower cost of goods sold means less is being subtracted from the beginning inventory, leaving a higher ending inventory value.

An Attribute Associated with Inventory Valuation Methods Is That the Lower