If Inventory Levels Are Stable or Increasing an Argument That

question 5

Multiple Choice

If inventory levels are stable or increasing an argument that favors the FIFO method as compared to LIFO is

• A) Income taxes tend to be reduced in periods of rising prices
• B) Cost of goods sold tends to be stated at approximately current cost in the income statement
• C) Cost assignments typically parallel the physical flow of the goods
• D) Income tends to be smoothed as prices change over time

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