CFA Practice Question
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?
Correct Answer: False
The FIFO and weighted average inventory valuation methods would yield the same cost of goods sold only if ending inventory was zero or prices remained exactly the same throughout the period.
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 |