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A company has items in inventory with two costing methods: FIFO and Standard. The company needs to calculate the cost of all items at month end and provide a total inventory value to the finance department.
You need to determine the total value of inventory.
Which costing method requires running the inventory close?
Suggested Answer: A
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36 comments · newest first
PA
Pamella
11 months ago
Just a reminder, LIFO isn’t even in the options!
LU
Luisa
11 months ago
Standard Cost items also need a close, right?
SA
Salley
11 months ago
Wait, are you sure about that?
FA
Farrah
11 months ago
Totally agree, FIFO is the way to go!
LE
Lemuel
11 months ago
FIFO requires running the inventory close.
AP
Apolonia
12 months ago
I’m leaning towards D, but I’m a bit confused about whether FIFO might also need a close.
EL
Elvis
12 months ago
I feel like LIFO and Moving Average were mentioned in class, but I can't recall if they relate to this question.
DO
Donette
12 months ago
I practiced a similar question last week, and I believe Standard Cost items need the inventory close.
CA
Cathern
1 year ago
I think I remember that FIFO doesn't require a close, but I'm not entirely sure about Standard costing.
GL
Gladys
1 year ago
I'm a little confused by this question. The wording about "running the inventory close" isn't super clear to me. I'll need to think more about what that means in the context of FIFO and Standard Cost. Maybe I'll jot down some notes about the key differences between those two methods to help me figure this out.
KA
Kanisha
1 year ago
Ah, I see what they're getting at here. FIFO and Standard Cost are the two costing methods mentioned, so the answer must be related to one of those. I'm pretty confident that FIFO requires running the inventory close, since it's tracking the flow of specific items. Standard Cost might not need that.
BE
Bea
1 year ago
Okay, let me think this through. The question is asking about the costing method that requires running the inventory close. I'm a bit unsure about the differences between FIFO and Standard Cost, so I'll need to review those before answering.
LA
Lavonne
1 year ago
Hmm, this seems straightforward. I think the key is to focus on the costing methods mentioned - FIFO and Standard. The question is asking which one requires running the inventory close, so I'll need to think through the differences between those two methods.
IR
Irma
1 year ago
I think hybrid mobile apps are more portable since they use web technologies that can run on multiple platforms.
IL
Iluminada
1 year ago
This question seems straightforward. I think the answer is Planned orders, since the material requirement plan logic is used to determine those.
CH
Chanel
1 year ago
Wait, is this a trick question? I bet the correct answer is 'all of the above' and the company is trying to catch us out!
GE
German
1 year ago
A: Maybe it's a combination of both, A) FIFO and Standard Cost items.
RA
Rashad
1 year ago
B: No, I believe it's C) LIFO, Moving Average, and Date Weighted Average items.
AF
Afton
1 year ago
A: I think the answer is B) FIFO items only.
RE
Rebecka
1 year ago
Hold on, aren't LIFO, Moving Average, and Date Weighted Average items also affected? This question is tricky!
JA
Jacquelyne
1 year ago
Hmm, I'm pretty sure it's D. Standard Cost items are the only ones that need the inventory close process.
EM
Emiko
1 year ago
Definitely. It's crucial for accurate financial reporting.
SE
Selma
1 year ago
No problem! It's important to understand the costing methods for inventory valuation.
CH
Chanel
1 year ago
Oh, really? I didn't know that. Thanks for the clarification.
LI
Linwood
1 year ago
I think you're mistaken. It's actually A) FIFO and Standard Cost items that require running the inventory close.
AU
Audry
2 years ago
I think it's option B. FIFO items only need to be run at month-end, not the Standard Cost items.
BO
Bonita
1 year ago
Yes, that's correct. Standard Cost items do not require running the inventory close.
BO
Bonita
1 year ago
I agree, option B is correct. FIFO items only need to be run at month-end.
AD
Adrianna
2 years ago
I'm not sure, but I think LIFO, Moving Average, and Date Weighted Average items also require running the inventory close.
RO
Roosevelt
2 years ago
I agree with Shay, because FIFO ensures that the oldest costs are matched with the oldest revenues.
CL
Clemencia
2 years ago
FIFO and Standard Cost items require running the inventory close to calculate the total inventory value. Easy peasy!
RI
Ricki
1 year ago
D) Standard Cost items only
AR
Art
1 year ago
C) LIFO, Moving Average, and Date Weighted Average items
AD
Adelina
1 year ago
B) FIFO items only
TA
Tamar
1 year ago
A) FIFO and Standard Cost items
SH
Shay
2 years ago
I think the costing method that requires running the inventory close is FIFO and Standard Cost items.