A Company Uses LIFO in One Year,then Switches to FIFO

question 153

Multiple Choice

A company uses LIFO in one year,then switches to FIFO and then to average-cost.This is a violation of the:

• A)disclosure principle
• B)historical cost principle.
• C)consistency principle.
• D)conservatism principle.

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Definitions:

Socially Optimal Price

A price point at which the social cost of producing a good or service is equal to the social benefit derived from its consumption, leading to an efficient allocation of resources.

Units

A standard measure or quantity used as a means of expressing or accounting for something, such as in production, sales, or comparison.

Pollution Permits

Licenses issued by governments that allow the holder to emit a certain amount of pollution; these can be traded in a market.

Interested Parties

Refers to individuals or groups that have a stake or interest in the outcome of a project, decision, or outcome.