Effect of inventory cost flow on financial statements

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Exercise - Effect of inventory cost flow assumption on financial statements.

Required

For each of the following situations, indicate whether FIFO, LIFO, or weighted average applies.

a. In a period of falling prices, net income would be highest.

b. In a period of falling prices, the unit cost of goods would be the same for ending inventory and cost of goods sold.

c. In a period of rising prices, net income would be highest.

d. In a period of rising prices, cost of goods sold would he highest.

e. In a period of rising prices, ending inventory would be highest.

Reference no: EM131184016

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