In periods of falling prices
A) FIFO will result in a higher ending inventory valuation than the average cost formula.
B) FIFO will result in a higher cost of goods sold than the average cost formula.
C) the average cost formula will result in a higher cost of goods sold than the FIFO cost formula.
D) the average cost formula will result in a lower ending inventory valuation than the FIFO cost formula.

Question

Quizplus · Accepted Answer

In periods of falling prices, FIFO will result in a higher cost of goods sold than the average cost formula because older, higher-cost inventory is sold first.

In Periods of Falling Prices