CFA Practice Question

There are 520 practice questions for this study session.

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
You need to log in first to add your comment.