Which of the following statements is correct?
A)The choice of an inventory costing method is dependent upon the actual physical flow of the inventory.
B)LIFO should be used during a period of increasing prices when the objective is to maximize the ending inventory value on the balance sheet.
C)FIFO should be used during a period of decreasing prices when the objective is to maximize the gross profit reported on the balance sheet.
D)The average cost method will result in an ending inventory balance which is somewhere between LIFO and FIFO when inventory prices are changing.

Question

Quizplus · Accepted Answer

Use of the average cost method results in cost of goods sold and ending inventory being reported at amounts between the LIFO and FIFO extremes.

Which of the Following Statements Is Correct