For Each Item Listed in 1 Through 4, Place the Letter

question 64

Essay

For each item listed in 1 through 4, place the letter of the accounting effect (a through e) in the space provided. You may use each letter more than once or not at all.
$\quad$$\quad$$\quad$$\quad$$\quad$ Accounting Effects
a. Current rat?o and earn?ngs per share increase.
b. Current ratio and earnings per share are not affected.
c. Current ratio increases and earnings per share decreases.
d. Current ratio decreases and earnings per share increases.
e. Current ratio and earnings per share decrease.

____ 1. During a period of increasing inventory and rising prices, a company decides to use FIFO instead of LIFO.
____ 2. During a period of increasing inventory and rising prices, a company decides to use Average instead of FIFO.
____ 3. During a period of static prices, a company decides to use FIFO instead of LIFO.
____ 4. A company applies lower-of-cost-or-market for valuing ending inventory when market price is less than cost.

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Definitions:

Growth Strategy

Plans and actions aimed at increasing a company's size, revenues, market share, or competitive positioning.

Cellular Telephone

A wireless communication device that allows users to make and receive calls over a radio frequency link while moving within a service area.

Product Development

The complete process of bringing a new product or service to market, from initial concept to release.

Marketing Concepts

The foundational ideas behind marketing practices, focusing on customer needs, market segmentation, and integrated marketing efforts to achieve business goals.