During a Year of Decreasing Prices and Decreasing Inventory, Which

question 112

Multiple Choice

During a year of decreasing prices and decreasing inventory, which cost flow assumption would measure the greatest net income?

• A)FIFO
• B)LIFO
• C)Average
• D)Both a and c are correct.

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Definitions:

Schedule A

Schedule A is a tax form used for reporting itemized deductions on an individual's federal income tax return, allowing taxpayers to list deductible expenses such as medical and dental expenses, taxes paid, and interest paid.

Itemized Deduction

Tax deductions that allow taxpayers to list each deductible expense they qualify for, potentially reducing taxable income.

Sales Taxes

Taxes imposed on the sale of goods and services, typically collected by retailers at the point of sale and remitted to the tax authority.

Prescription Drugs

Medications that require a doctor’s prescription before they can be purchased or dispensed.