One Advantage of LIFO Over FIFO Under Normal Conditions Is

question 40

Multiple Choice

One advantage of LIFO over FIFO under normal conditions is that:

• A)it reports higher retained earnings.
• B)it results in higher cash flows.
• C)it results in higher current ratios.
• D)it results in higher gross margins.

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Definitions:

Redistribution of Income

Government policies or mechanisms aimed at adjusting the distribution of income among a population to achieve social or economic objectives.

Wealthy Classes

Social groups consisting of individuals or families that possess significantly higher amounts of capital, assets, or wealth compared to the average population.

Central Planning Board

A government body responsible for determining the allocation of resources and directing economic activity in a centrally planned economy.

Pure Capitalist Economy

An economic system where private individuals and firms control all resources, and market forces determine resource allocation with minimal government intervention.