Company A's Line of Credit at the Bank Is Based

question 76

Multiple Choice

Company A's line of credit at the bank is based on the dollar amount of inventory on hand.Each month the bank adjusts the line of credit based on the inventory amount provided by the company.If prices are rising which cost flow assumption would management most likely prefer?

• A)FIFO
• B)Net realizable value
• C)Average cost
• D)Specific identification