A company sells a climbing kit and uses the perpetual inventory system to account for its merchandise. The beginning balance of the inventory and its transactions during January were as follows: If the ending inventory is reported at $276, what inventory method was used?
A) LIFO method.
B) FIFO method.
C) Weighted average method.
D) Specific identification method.
E) Retail inventory method.

Question

Quizplus · Accepted Answer

The LIFO (Last-In, First-Out) method assumes that the last items purchased are the first ones sold. In periods of rising prices, LIFO results in higher cost of goods sold and lower ending inventory values, which matches the scenario described.

A Company Sells a Climbing Kit and Uses the Perpetual