- CFA Exams
- CFA Level I Exam
- Topic 3. Financial Statement Analysis
- Learning Module 22. Inventories
- Subject 2. Inventory Valuation Methods
CFA Practice Question
Which inventory valuation method matches the physical flow of the inventory items?
A. Specific identification method
B. Weighted average cost
C. LIFO
Explanation: Under this method, the cost of sales and the cost of ending inventory reflect the actual costs incurred to purchase the items specifically identified as sold and the items specifically identified as remaining in inventory.
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