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Basic Question 0 of 2
The FIFO and weighted average inventory valuation methods would result in the same cost of goods sold for a period if beginning inventory was zero and costs were steadily declining during the period. True or False?
User Contributed Comments 5
| User | Comment |
|---|---|
| sarath | If the ending inventory is zero means all the inventory is sold. then FIFO and weighted average will yield the same result. |
| faya | If EI=0 then weighted ave = FIFO = LIFO because all stock is sold |
| bokica | expect here the beg.inv. was zero |
| vatsal92 | FIFO COGS will be higher and avergae inventory COGS will be lower. |
| choas69 | why didnt they mention LIFO in the explanation x.x |
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Learning Outcome Statements
describe different inventory valuation methods (cost formulas);
calculate and compare cost of sales, gross profit, and ending inventory using different inventory valuation methods and using perpetual and periodic inventory systems;
calculate and explain how inflation and deflation of inventory costs affect the financial statements and ratios of companies that use different inventory valuation methods;
CFA® 2024 Level I Curriculum, Volume 3, Module 22.