Choose the Statement That Best Describes the Effects of the LIFO

question 57

Multiple Choice

Choose the statement that best describes the effects of the LIFO inventory valuation method compared with FIFO or average cost.

• A) During periods of rising prices LIFO gives the highest gross profit and the lowest closing inventory value.
• B) During periods of falling prices LIFO gives the highest gross profit and the lowest closing inventory value.
• C) During periods of rising prices LIFO gives the lowest gross profit and the lowest closing inventory value.
• D) None of the above.

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Definitions:

Coefficient R

A measure used in statistics to represent the strength and direction of a linear relationship between two variables on a scatter plot.

Variance

A measure of the dispersion of a set of values, indicating how much the values differ from the mean.

Linear Relationship

A type of association where any change in an independent variable is accompanied by a proportional change in a dependent variable.

1-methylcyclohexanol

A secondary alcohol that features a methyl group attached to a cyclohexane ring.