In the year ended 31 August 20X4, Aplus; records show closing inventory of 1,000 units compared to 950 units of opening inventory. Which of the following statements is true assuming that prices have fallen throughout the year?
A、Closing inventory and profit are higher using FIFO rather than AVCO
B、Closing inventory and profit are lower using FIFO rather than AVCO
C、Closing inventory is higher and profit lower using FIFO rather than AVCO
D、Closing inventory is lower and profit higher using FIFO rather than AVCO
A、Closing inventory and profit are higher using FIFO rather than AVCO
B、Closing inventory and profit are lower using FIFO rather than AVCO
C、Closing inventory is higher and profit lower using FIFO rather than AVCO
D、Closing inventory is lower and profit higher using FIFO rather than AVCO
【参考答案及解析】
If prices have fallen during the year； AVCO will give a higher value of closing inventory than FIFO, which values goods for resale at the latest prices.Where the value of closing inventory is higher, profits are higher.
If prices have fallen during the year； AVCO will give a higher value of closing inventory than FIFO, which values goods for resale at the latest prices.Where the value of closing inventory is higher, profits are higher.