Which of the Following Combinations of Accounting Practices Will Lead $\text { Depreciation Method} \quad\quad \text {Inventory Method }$

question 71

Multiple Choice

Which of the following combinations of accounting practices will lead to the highest reported earnings in an inflationary environment? $\text { Depreciation Method} \quad\quad \text {Inventory Method }$
A. $\text { Straight-line } \quad \quad\quad\quad\quad\quad\text { LIFO }$
B. $\text { Double-declining balance } \quad \text { LIFO }$
C. $\text { Straight-line} \quad\quad\quad\quad\quad\quad\quad\text { FIFO}$
D. $\text { Double-declining balance } \quad \text { FIFO }$

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Flows

In economics, movements of goods, services, capital, or money among different sectors or regions within an economy.

Profit Stream

A continuous flow of profits over time from a business operation or investment.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, considering the time value of money.

Hiring Capital

The resources, often financial, that an organization allocates to the process of recruiting and acquiring new employees or talent.