Question

Which method will result in the same cost of goods sold amount whether it is computed using the periodic inventory system or the perpetual inventory system?

1) LIFO and FIFO will never result in the same cost of goods sold
2) LIFO
3) FIFO

Answer 1

The FIFO (First-In, First-Out) inventory method results in the same COGS under both the periodic and perpetual inventory systems, provided there are no changes in inventory prices.

Step-by-step explanation:

The method that will result in the same cost of goods sold (COGS) amount whether it is computed using the periodic inventory system or the perpetual inventory system is FIFO, which stands for First-In, First-Out. Under the FIFO method, the oldest inventory items are recorded as sold first, thus the costs assigned to the COGS will be the same under both inventory systems, assuming that there are no inventory price changes during the accounting period. In contrast, the LIFO method (Last-In, First-Out) could result in different COGS under the two systems due to the timing of inventory purchases and price changes.