The inventory cost flow assumption that assigns the highest cost to ending inventory in a period of rising prices is moving weighted average.

Question

Quizplus · Accepted Answer

The inventory cost flow assumption that assigns the highest cost to ending inventory in a period of rising prices is actually the FIFO (first-in, first-out) method, not moving weighted average. The moving weighted average method calculates a new average cost each time a purchase is made, and therefore does not assign a specific cost to the ending inventory.

The Inventory Cost Flow Assumption That Assigns the Highest Cost