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Basic Question 22 of 26
Prices have been rising during the past few years. Companies Ashley and Taylor are in the same industry and use the same accounting methods except for inventory valuation. Ashley uses FIFO and Taylor uses LIFO. Which of the following statements is true?
B. The cost of goods sold for Taylor more closely approximates current replacement values.
C. The inventories for Taylor and Ashley are the same.
A. The inventory on Taylor's books closely approximates current market prices.
B. The cost of goods sold for Taylor more closely approximates current replacement values.
C. The inventories for Taylor and Ashley are the same.
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Learning Outcome Statements
describe the measurement of inventory at the lower of cost and net realisable value and its implications for financial statements and ratios
CFA® 2024 Level I Curriculum, Volume 2, Module 6.