Multiple Choice
All of the following are inventory costing methods used under a periodic inventory system except:
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5. Inventory
Financial Statement Effects of Inventory Costing Methods
Multiple Choice
Which of the following is NOT an inventory costing method?
A
Straight-Line
B
Weighted Average Cost
C
LIFO (Last-In, First-Out)
D
FIFO (First-In, First-Out)
Verified step by step guidance1
Understand the concept of inventory costing methods: Inventory costing methods are techniques used to assign costs to inventory and cost of goods sold. Common methods include FIFO, LIFO, and Weighted Average Cost.
Review the provided options: The options given are Straight-Line, Weighted Average Cost, LIFO, and FIFO.
Identify the odd term: Straight-Line is a depreciation method, not an inventory costing method. It is used to allocate the cost of an asset evenly over its useful life.
Compare the other options: Weighted Average Cost, LIFO, and FIFO are all recognized inventory costing methods used in accounting to value inventory and calculate the cost of goods sold.
Conclude that Straight-Line is NOT an inventory costing method, as it pertains to asset depreciation rather than inventory valuation.
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