During a Period of Rising Prices,if a Firm Desired to Report

question 197

Multiple Choice

During a period of rising prices,if a firm desired to report a low net income figure in hopes of reducing their income tax liability,the firm would use the ________ inventory valuation method.

• A)FIFO (first in,first out)
• B)LIFO (last in,first out)
• C)sliding scale
• D)average cost

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Definitions:

Statement of Cash Flows

A financial report that provides a summary of a company's cash inflows and outflows over a specific period.

Tangible Capital Assets

Physical assets owned by a business that are used in its operation and have a useful life longer than one fiscal year, such as buildings and machinery.

PSAB

stands for Public Sector Accounting Board, which sets accounting standards for public sector entities in some countries, focusing on transparency and accountability.

Controlled Entities

Entities over which another entity has the power to govern financial and operating policies, typically through ownership of a majority voting interest.