Identify the inventory costing method best described by each of
the following separate statements. Assume a period of increasing
costs.
1. Mimics the actual flow of inventory for most businesses.
2. Cost of goods sold approximates its current cost.
3. Precisely matches the costs of items with the revenues they generate.
4. Yields the lowest net income.
5. Has the lowest tax expense because of reporting the lowest net income.
OPTIONS: WEIGHTED AVERAGE, SPECIFIC IDENTIFICATION, FIFO, OR LIFO
1. Mimics the actual flow of inventory for most businesses.
2. Cost of goods sold approximates its current cost.
3. Precisely matches the costs of items with the revenues they generate.
4. Yields the lowest net income.
5. Has the lowest tax expense because of reporting the lowest net income.
OPTIONS: WEIGHTED AVERAGE, SPECIFIC IDENTIFICATION, FIFO, OR LIFO
