Exercise - Effect of inventory cost flow assumption on financial statements.
Required
For each of the following situations, indicate whether FIFO, LIFO, or weighted average applies.
a. In a period of falling prices, net income would be highest.
b. In a period of falling prices, the unit cost of goods would be the same for ending inventory and cost of goods sold.
c. In a period of rising prices, net income would be highest.
d. In a period of rising prices, cost of goods sold would he highest.
e. In a period of rising prices, ending inventory would be highest.