# ECONOMICS

## COST ACCOUNTING

### INTRODUCTION TO COST ACCOUNTING

 Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Which one of the following process costing methods includes only current costs?
 A FIFO method. B LIFO method. C NIFO method. D Weighted-average method. E Moving-average method.
Explanation:

Detailed explanation-1: -Which one of the following process costing methods includes only current costs in the calculations of cost per equivalent unit? FIFO method. The key difference between weighted-average and FIFO process costing methods is the handling of the partially completed: Beginning work-in-process inventory.

Detailed explanation-2: -FIFO stands for “First-In, First-Out”. It is a method used for cost flow assumption purposes in the cost of goods sold calculation. The FIFO method assumes that the oldest products in a company’s inventory have been sold first. The costs paid for those oldest products are the ones used in the calculation.

Detailed explanation-3: -weighted average method: combines beginning inventory costs (prior period work) with costs from current period work. 2. first-in, first-out (FIFO) method: separates beginning inventory costs (prior period work) from costs of current period work.

Detailed explanation-4: -For Financial Statements If your goal is to show larger profits and more assets on your financial statements, you want to reduce your costs of goods sold and increase your inventory value. Assuming that costs generally rise, FIFO will typically be more advantageous.

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