Which of the Following Statements About Inventories Is True

question 44

Multiple Choice

Which of the following statements about inventories is true?

• A)U.S. generally accepted accounting principles (GAAP) require the use of lower of cost or market valuation basis for inventories.
• B)Last-In, First-Out (LIFO) inventory accounting makes management of income more difficult than First-In, First-Out (FIFO) accounting.
• C)During inflation, LIFO inventory accounting tends to overstate the current ratio.
• D)FIFO inventory balances generally contain old and outdated costs that have little or no relationship to current costs.