Wize University Introduction to Financial Accounting Textbook > Inventory
Effects of Costing Methods of Financial Position
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Effects of Costing Methods on Financial Position
Costing method decisions will impact the company's financial statements in many places and depends on the trend in supplier pricing.
Wize Tip
Generally prices are increasing.
During time of Increasing Prices
During time of Decreasing Prices
Practice: Effects of Costing Methods on Financial Position
Select the correct answer.
ABC Inc. reported COGS of $50,000 using the FIFO inventory costing method. If suppliers prices are generally increasing, what would be the effect on profit if the company elects to change to the average-costing method.