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marco primerano
on Nov 18, 2024

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If inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the highest net income is

A) periodic
B) LIFO
C) FIFO
D) average cost

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy.

Net Income

The residual earnings of a company following the subtraction of all costs and taxes from its revenue.

Costing Method

An accounting approach used to value inventory and determine the cost of goods sold, which can vary, such as FIFO (First-In, First-Out) or LIFO (Last-In, First-Out).

  • Analyze how changes in price levels, either an increase or decrease, impact the valuation of inventory and the calculation of income.
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Salma SheikhNov 20, 2024
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