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• D)FIFO inventory balances generally contain old and outdated costs that have little or no relationship to current costs.

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Definitions:

Financing Statement

A document filed by a creditor to indicate a security interest in the debtor’s assets, used to perfect a lien.

Secured Party

An individual or organization that holds interest in a secured transaction as a creditor, protected by collateral.

Financing Statement

A document filed to give public notice of a secured party's interest in the personal property of a debtor, usually in relation to a secured transaction.

Improper Filing

The submission of legal or official documents in a manner that does not comply with prescribed requirements or regulations.