{"id":52062,"date":"2024-04-15T23:33:49","date_gmt":"2024-04-15T23:33:49","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=52062"},"modified":"2024-04-15T23:33:49","modified_gmt":"2024-04-15T23:33:49","slug":"during-the-period-of-rising-prices-higher-profits-can-be-shown-by-valuing-stock-at","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/during-the-period-of-rising-prices-higher-profits-can-be-shown-by-valuing-stock-at\/","title":{"rendered":"During the period of rising prices, higher profits can be shown by valuing stock at:"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a9746167a093\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    L.I.F.O. basis                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"true\">\r\n                    F.I.F.O. basis                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    Simple average price                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"false\">\r\n                    Weighted average price                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is: <strong>B. F.I.F.O. basis<\/strong><\/p>\n<p>First-in, first-out (FIFO) is a method of accounting for inventory that assumes that the first goods purchased are also the first goods sold. This means that the cost of goods sold is based on the cost of the oldest inventory items, and the ending inventory is based on the cost of the most recent inventory items.<\/p>\n<p>During a period of rising prices, FIFO will result in a higher cost of goods sold and a lower ending inventory. This will, in turn, result in higher profits.<\/p>\n<p>The other options are incorrect because they do not result in higher profits during a period of rising prices.<\/p>\n<ul>\n<li><strong>L.I.F.O.<\/strong> (last-in, first-out) is a method of accounting for inventory that assumes that the last goods purchased are also the first goods sold. This means that the <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> cost of goods sold is based on the cost of the newest inventory items, and the ending inventory is based on the cost of the oldest inventory items. During a period of rising prices, LIFO will result in a lower cost of goods sold and a higher ending inventory. This will, in turn, result in lower profits.<\/li>\n<li><strong>Simple average price<\/strong> is a method of accounting for inventory that assumes that the cost of goods sold is based on the average cost of all the inventory items. During a <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div> period of rising prices, the simple average price will be higher than the cost of the most recent inventory items and lower than the cost of the oldest inventory items. This will, in turn, result in profits that are somewhere in between the profits that would be generated using FIFO and LIFO.<\/li>\n<li><strong>Weighted average price<\/strong> is a method of accounting for inventory that assumes that the cost of goods sold is based on the weighted average of the cost of all the inventory items. During a period of rising prices, the weighted average price will be higher than the cost of the most recent inventory items and lower than the cost of the oldest inventory items. This will, in turn, result in profits that are somewhere in between the profits that would be generated using FIFO and LIFO.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>During the period of rising prices, higher profits can be shown by valuing stock at:<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/during-the-period-of-rising-prices-higher-profits-can-be-shown-by-valuing-stock-at\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta 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