Which of the Following Statements Is Correct When Inventory Unit

question 113

Multiple Choice

Which of the following statements is correct when inventory unit costs are increasing?

• A)LIFO will result in lower net income and a higher inventory valuation than will FIFO.
• B)LIFO will result in higher net income and lower inventory valuation than will FIFO.
• C)FIFO will result in lower net income and a lower inventory valuation than will LIFO.
• D)FIFO will result in higher net income and a higher inventory valuation than will LIFO.

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Definitions:

Investment Expenditures

Spending on capital goods by firms and households which will be used for future production of goods and services.

GDP Accounting

A method used to calculate the gross domestic product of a country, summing up the total value of all goods and services produced over a specific time period.

Tangible Goods

Tangible goods are physical items that can be touched and seen, distinguished from services or digital products.

Intangible Services

Services that cannot be physically touched or stored, such as education, consulting, or legal advice.