Question

Assuming purchase costs are declining and a periodic inventory system is used, determine the statements below which correctly describe what is happening to cost of goods sold under FIFO, LIFO and weighted average cost flow methods. (Check all that apply.) A. Companies using LIFO will report the smallest cost of goods sold B. Companies using FIFO will pay higher taxes than companies using LIFO, assuming all else being equal companies using FIFO will report the bhest gross profit and net income. C. Weighted average cost of goods sold will be between FIFO and LIFO costs of D. goods sold. companies using FIFO will report the smallest cost of goods sold.

Answer 1

Answer:

Explanation:

 The first statement is Incorrect that Companies using LIFO will report the smallest cost of goods sold. Rest all the three statements that have been provided are correct.

Statement A - Incorrect

Statement B – Correct

Statement C – Correct

Statement D – correct the goods sold. companies using FIFO will report the smallest cost of goods sold.