All else being equal, which of the following statements is correct for a company that uses the FIFO costing formula with a perpetual inventory system (compared to a periodic system)?
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 both systems.
D) The periodic system would not require any additional entries at the end of the period.

Question

Quizplus · Accepted Answer

The FIFO (First-In, First-Out) costing formula will result in the same value of ending inventory under both perpetual and periodic inventory systems because the order in which costs are assigned to goods does not change based on the timing of when the inventory is counted or when costs are allocated.

All Else Being Equal, Which of the Following Statements Is