
Understanding Inventory Valuation Methods
Authored by Rakesh Kumar Julka
Business
University
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15 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which inventory valuation method assumes that the oldest inventory items are sold first?
LIFO Method
FIFO Method
Weighted Average Method
Specific Identification Method
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
In the LIFO method, what does LIFO stand for?
Last In, First Out
Last In, First On
Last Inventory, First Out
Latest In, First Out
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which inventory method averages out the cost of all inventory items available for sale during the period?
FIFO Method
LIFO Method
Weighted Average Method
Specific Identification Method
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How does the FIFO method affect the cost of goods sold during a period of rising prices?
It increases the cost of goods sold
It decreases the cost of goods sold
It has no effect on the cost of goods sold
It results in the highest cost of goods sold
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which inventory valuation method is likely to result in the lowest ending inventory value during a period of rising prices?
FIFO Method
LIFO Method
Weighted Average Method
Specific Identification Method
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the primary advantage of using the Weighted Average Method for inventory valuation?
It matches the actual flow of goods
It smooths out price fluctuations
It results in the lowest tax liability
It is the easiest to implement
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which inventory valuation method is not allowed under International Financial Reporting Standards (IFRS)?
FIFO Method
LIFO Method
Weighted Average Method
Specific Identification Method
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