IFRS Do Not Allow the Use of LIFO Because It

question 69

Multiple Choice

IFRS do not allow the use of LIFO because it

• A)would have to be allowed for tax reporting in each country
• B)would result in too many overstatements of income
• C)is clearly inconsistent with any presumed physical flow of inventory
• D)would have to be the only method permitted

---

Definitions:

Profit-Maximizing

The process by which a firm determines the price and output level that returns the greatest profit.

Purely Competitive

Refers to a market structure where many firms sell identical products, allowing no single firm to influence the market price.

Marginal Resource Cost

The extra cost associated with utilizing one additional unit of a resource in the production process.

Daily Wage

A pay rate based on the amount of work completed in a single day, typically used for manual or labor-intensive jobs.