One Disadvantage of the LIFO Method Is That

question 111

Multiple Choice

One disadvantage of the LIFO method is that:

• A)an equal cost is assigned to each unit,so net income does not fluctuate as much as with other methods.
• B)flow of goods and flow of costs are the same.
• C)it matches current selling prices and current costs.
• D)ending inventory is valued at very old costs.

Recognize the importance of maintaining a positive relationship with the recipient despite delivering bad news.

Know the guidelines for making a clear statement of bad news when organizing a negative message using the indirect method.

Understand how to effectively close a negative message to build goodwill.

Discern when and how to offer alternative solutions or future possibilities when refusing requests or claims.

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Definitions:

Debt

An amount of money borrowed by one party from another, to be paid back with interest.

Shareholder Value

The worth delivered to shareholders due to management's ability to grow sales, earnings, and dividends over time.

Business Costs

All expenses incurred in the operation of a business, including manufacturing, marketing, and administrative expenses.

Fixed

A term describing costs or payments that do not change in amount over a certain period, regardless of production levels, business activity, or other factors.