18

Match each description to the appropriate cost flow assumption (a-c). Clear All Produces the highest gross profit when costs are decreasing Never results in either the highest or lowest possible net income. Produces results that are similar to the specific identification method. Assigns the same value to all inventory units. FIFO Rarely used with a perpetual inventory system. LIFO Produces the same cost of goods sold under both the periodic and the perpetual inventory systems. FIFO Rarely used with a perpetual inventory system. LIFO Produces the same cost of goods sold under both the periodic and the perpetual inventory systems. Weighted average Cost of the latest purchases are assigned to ending inventory. Does not follow the physical flow of goods in most cases. Produces the highest ending inventory when costs are increasing Prohibited under International Financial Reporting Standards (IFRS). Widely used for tax purposes