Question

The inventory method that will always produce the same amount for cost of goods sold in a periodic inventory system as in a perpetual inventory system would be: Weighted average. FIFO. LIFO. None of these answer choices is correct.

Answer 1

Answer:

The correct answer is FIFO.

Explanation:

The first in, first out (FIFO) is method of inventory valuation in which the first goods purchased are also the first goods sold. Valuation of closing stock and issuance is done based on this assumption.

Under the FIFO method, the earliest goods purchased are the first ones removed from the inventory account. Based on this characteristic of FIFO valuation method the amount of cost of good sold under both inventory system will be same.