Final answer:
Most companies that use a LIFO inventory system employ the dollar-value LIFO method, which allows for better handling of price fluctuations by grouping inventory into dollar-value pools. The correct option is C.
Step-by-step explanation:
The method employed by most companies that use a Last-In, First-Out (LIFO) system is commonly known as dollar-value LIFO. LIFO is an inventory costing method which assumes that the last items placed in inventory are the first sold during an accounting period. The primary purpose of using LIFO is to match the most recent costs to revenues in order to provide a better measure of current earnings.
The specific application of LIFO can vary, but the dollar-value LIFO method is employed to address issues that arise from changing inventory costs. This method involves grouping inventory into pools based on similar items and measures the value of the inventory in dollars, rather than in physical units. This approach allows for the fluctuations in the cost of inventory due to factors such as inflation or deflation to be accounted for more efficiently.
Other methods mentioned in the query, such as specific goods LIFO, specific goods pooled LIFO, and weighted-average LIFO, are less commonly used. Specific goods LIFO is challenging to maintain in practice as it requires tracking each individual item in inventory. Pooled LIFO methods combine inventory items into pools and apply LIFO assumptions to these pools, while the weighted-average method is used in other inventory costing systems like FIFO (First-In, First-Out), but is not a LIFO method.
To summarize, dollar-value LIFO is the predominant approach used by companies implementing a LIFO system because it offers a practical way to cope with changing prices while adhering to LIFO principles.