Effect of inventory cost flow assumption on financial statements
Required
For each of the following situations, fill in the blank with FIFO, LIFO, or weighted average.
a. _____ would produce the highest amount of net income in an inflationary environment.
b. _____ would produce the highest amount of assets in an inflationary environment.
c. _____ would produce the lowest amount of net income in a deflationary environment.
d. _____ would produce the same unit cost for assets and cost of goods sold in an inflationary environment.
e. _____ would produce the lowest amount of net income in an inflationary environment.
f. _____ would produce an asset value that was the same regardless of whether the environment was inflationary or deflationary.
g. _____ would produce the lowest amount of assets in an inflationary environment.
h. _____ would produce the highest amount of assets in a deflationary environment.