- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 6. Analysis of Inventories
- Subject 1. Inventory Valuation
CFA Practice Question
If inventory costs remain relatively constant from period to period, which inventory methods are the most appropriate in the allocation of cost flow between COGS and inventory carrying value?
II. FIFO
III. Weighted average method
IV. LIFO
I. Specific identification method
II. FIFO
III. Weighted average method
IV. LIFO
Correct Answer: All of them
Given relatively constant prices, the allocation of costs between COGS and ending inventory would be very similar under all of the four methods.
User Contributed Comments 3
| User | Comment |
|---|---|
| ColonelCFA | the things you learn... |
| schweitzdm | Constant prices = same results |
| choas69 | Given stable prices; inventory, COGS and Earnings will have the same results. |