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Basic Question 2 of 19

Which inventory cost flow assumption normally will yield the highest cost of goods sold during a period of declining prices?

A. Weighted average
B. FIFO
C. LIFO
Check Answer Previous Q Next Q Print

User Contributed Comments 6

User Comment
Stace Definitely B
treakj But only if the first purchase cost is lower than the recently purchased cost, isnt it? Otherwise the LIFO would still show a higher COGS.
surob treakj: if not given, assume the price is rising.
ddrmax declining pricing....
ericczhang "...during a period of declining prices"
johntan1979 FEE-FI-FO-FUM!
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Craig Baugh

Craig Baugh

Learning Outcome Statements

describe the financial statement presentation of and disclosures relating to inventories;

explain issues that analysts should consider when examining a company's inventory disclosures and other sources of information;

calculate and compare ratios of companies, including companies that use different inventory methods;

analyze and compare the financial statements of companies, including companies that use different inventory methods.

CFA® 2024 Level I Curriculum, Volume 3, Module 22.