Solved

Match the Statements Below with the Appropriate Cost Flow Method

Question 242

Matching

Match the statements below with the appropriate cost flow method.Some methods may be used more than once,and others may not be used at all.

Premises:
is difficult to apply when the inventory items are identical
results in the highest ending inventory value in a period of falling prices
results in the lowest net income in a period of rising inventory purchase costs
results in the highest net income in a period of rising inventory purchase costs
matches the costs of the most recently purchased items with sales on the income statement
Responses:
S = Specific identification method
W = Weighted average method
F = FIFO
L = LIFO

Correct Answer:

is difficult to apply when the inventory items are identical
results in the highest ending inventory value in a period of falling prices
results in the lowest net income in a period of rising inventory purchase costs
results in the highest net income in a period of rising inventory purchase costs
matches the costs of the most recently purchased items with sales on the income statement
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