Double Entry Door's Suppliers Maintained Very Stable Prices for Many

question 148

Multiple Choice

Double Entry Door's suppliers maintained very stable prices for many years, but Minnie has noticed that the cost of doors has been rising steadily for the past few years. She is concerned that, given the company's current accounting methods of basing its cost on the most recent doors purchased, this will result in a much lower net income than in the past. The most likely reason for her concern is that Double Entry has apparently been using

• A) the FIFO inventory valuation method to determine its cost of goods sold.
• B) a great deal of equity financing to purchase the doors.
• C) the LIFO inventory valuation method to determine its cost of goods sold.
• D) a depreciation method based on the average value of inventory.

Define diversity training and explain its significance to employees and organizations.

Understand the impact of diversity in cultural values on reward systems and benefits management.

Recognize the relationship between goal setting and organizational success.

Identify the characteristics of effective goals in organizations.

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Definitions:

Smooth Income

The practice or process of stabilizing income over time in order to manage fluctuations and avoid significant variations in earning levels.

Parity

A concept of economic equality or equivalence, such as between currencies or in the income levels between groups.

Price Supports

Government interventions to maintain the market price of a commodity or product at a certain level, often to protect producers from market fluctuations.

Marketing Loan Program

A federal farm subsidy under which certain farmers can receive a loan (on a per-unit-of-output basis) to plant a crop and then, depending on the harvest price of the crop, either pay back the loan with interest or keep the loan proceeds while forfeiting their harvested crop to the lender.