FIFO Assumes All but One of the Following

question 88

Multiple Choice

FIFO assumes all but one of the following:

• A)Sell the old inventory first
• B)Recent cost assigned to inventory not sold
• C)Sell the new inventory first
• D)Cost flow tends to follow physical flow
• E)None of these

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Definitions:

Positive Economics

The branch of economics that concerns itself with describing and explaining economic phenomena as they are, not as they should be.

Normative Economics

An area of economics that analyzes outcomes based on value judgments about what is desirable or what ought to be, rather than what merely is.

Supply and Demand

Fundamental economic concepts that describe how the availability of products (supply) and the desire for them (demand) determine prices.

Scarce

Describes resources or goods that are limited in availability and cannot satisfy all the wants and needs of consumers.