Which of the following statements is true?
A) Valuing inventory under LIFO may produce different results depending on whether a perpetual or periodic inventory system is used.
B) Valuing inventory under the weighted average cost method always produces the same results using either a perpetual or periodic inventory system.
C) Valuing inventory under FIFO may produce different results depending on whether a perpetual or periodic inventory system is used.
D) Using the specific identification method will produce different results depending on whether perpetual or

Question

Quizplus · Accepted Answer

Valuing inventory under LIFO (last-in, first-out) can produce different results depending on whether a perpetual or periodic inventory system is used. This is because LIFO assumes that the most recent items purchased will be the first ones sold, so when inventory levels fluctuate, different costs will be assigned to the items sold depending on whether the system is perpetual (which updates inventory records continuously) or periodic (which only updates inventory at the end of a period). Valuing inventory under FIFO (first-in, first-out) can also produce different results depending on the inventory system used, but this is not always the case with the weighted average cost method. Using the specific identification method means that the exact cost of each item sold is tracked, so the inventory system used will not impact the results.

Which of the Following Statements Is True