Answer the following three question assuming that inventory costs are decreasing

Question

Answer the following three question assuming that inventory costs are decreasing over time (i.e., assume a period of deflation).Enter the number corresponding to your answer in the box provided. Answer choices may be used once, more than once, or not at all. Be careful with matching questions because carmen randomizes the matches. Thus, if you print out the quiz to work on it and then enter your answer later in the week, it is very likely the order of the matches will be different. Therefore, exercise caution when entering your answer into carmen. Quiz scores will not be adjusted for errors in entering choices. This inventory costing method will show the highest amount of gross profit FIFO This inventory method will show the highest amount of net cash flows from operating LIFO weighted average. This inventory costing method will show cost of good sold at the most current acquisition costs all methods show the same amount.

Explanation / Answer

Answer:

a) This inventory method will show the highest amount of gross profit : LIFO

b) This inventory method will show the highest amount of net cash flows from operating activities : FIFO

c) This inventory costing method will show cost of goods sold at the most current acquisition costs : LIFO

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