Which of the Following Is Not Considered an Advantage of LIFO

question 144

Multiple Choice

Which of the following is not considered an advantage of LIFO when prices are rising?

• A) The inventory will be overstated.
• B) The more recent costs are matched against current revenues.
• C) There will be a deferral of income tax.
• D) A company's future reported earnings will not be affected substantially by future price declines.

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Definitions:

Cacao

The seed from which chocolate is made and is the product of the cacao tree, native to the Americas. It is also used in making cocoa butter and cocoa powder.

Commercial Use

The utilization of goods or services for business purposes, often involving selling or profit-making activities.

Coins

Metal pieces that are issued by governments as money, typically stamped with designs and inscriptions indicating their value.

Money

A means of exchange used to make payments for other goods and services as well as to measure their value.