Which One of the Following Is Not a Disadvantage of the LIFO

question 20

Multiple Choice

Which one of the following is not a disadvantage of the LIFO inventory cost flow assumption?

• A)the impact of LIFO liquidation profits
• B)failure to match the most recent costs with revenue
• C)the possibility of income manipulation by management
• D)impaired comparability between companies using LIFO

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Definitions:

Revenue Maximization

A strategy or objective focused on increasing the total income generated from sales or services, without necessarily maximizing profit.

Cournot Equilibrium

The Cournot equilibrium is a concept in economic theory where firms reach a state of balance in quantity and price in a duopoly, where each firm's output decision best responds to the output decision of the other firm.

Downward-Sloping

A term describing a curve or line that decreases in value as it moves from left to right, often used to describe demand curves in economics.

Cournot Equilibrium Price

A concept in oligopoly theory where each firm chooses its quantity to maximize profit, assuming the other firms' quantities remain fixed, leading to a stable market price.