Using LIFO Rather Than FIFO in a Time of Rising

question 63

Multiple Choice

Using LIFO rather than FIFO in a time of rising prices:

I. lowers the current ratio.
II. increases inventory turnover.
III. increases profit margin.
IV. increases debt to equity ratio

• A)I, II, and IV
• B)I and II
• C)II and III
• D)I only

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Definitions:

Implied Warranty of Merchantability

A legal presumption that a product will meet the reasonable expectations of quality and performance for goods of its kind.

Bicycle Merchant

A retailer specialized in the sale and service of bicycles and related accessories.

Nonconforming Goods

Products delivered under a sale contract that do not meet the specifications, quality, or quantity as stipulated by the agreement.

Seek Damages

The act of demanding compensation, typically through legal action, for harm or loss suffered due to another's actions or negligence.