FIFO Reports Higher Gross Profit and Net Income Than the LIFO

question 171

Multiple Choice

FIFO reports higher gross profit and net income than the LIFO method when ​

• A) ​prices are increasing
• B) ​prices are decreasing
• C) ​prices remain stable
• D) ​prices are reduced by 50%

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Definitions:

Fourth Amendment

An amendment to the U.S. Constitution that protects individuals from unreasonable searches and seizures by the government, requiring any warrant to be judicially sanctioned and supported by probable cause.

Probable Cause

A reasonable basis for believing that a crime may have been committed, which is necessary for certain legal actions like issuing a search warrant.

Unreasonable Searches

A term referring to searches conducted by law enforcement without a valid warrant or without an applicable exception to the warrant requirement, violating the Fourth Amendment.

Establishment Clause

One of two provisions in the First Amendment of the U.S. Constitution that protect citizens’ freedom of religion. It prohibits (i) the establishment of a national religion by Congress and (ii) the preference of one religion over another or of religion over nonreligious philosophies in general.