A Firm Has Used LIFO for Several Years During Which

question 19

Multiple Choice

A firm has used LIFO for several years during which costs have trended higher.If this firm achieves a substantial reduction in inventory quantities in 2020 by selling more merchandise than it purchases, the effect on 2020 net income of the inventory reduction (or LIFO liquidation) , compared to having no change in inventory quantity from the beginning to the end of 2020, is:

• A)net income for 2020 will be greater if the inventory quantity declines.
• B)net income for 2020 will be less if the inventory quantity declines.
• C)net income for 2020 will not be affected because of the inventory quantity decline.
• D)impossible to determine from the information given.

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Definitions:

Randomized

Pertains to assigning participants or variables in a study in a manner that is entirely based on chance, ensuring equitable distribution across various conditions or treatments.

Prospective Study

An observational research method in which participants are followed over time to observe outcomes of interest.

Retrospective Study

A research method that looks back at historical data or events to analyze outcomes or associations.

Childhood Obesity

A serious medical condition affecting children and adolescents, characterized by excess body fat that may have adverse effects on health.