Which of the Following Statements Is True About Specific-Goods Pooled

question 160

Multiple Choice

Which of the following statements is true about specific-goods pooled LIFO approach?

• A) It determines and measures any increases and decreases in a pool in terms of total dollar value
• B) Most companies using a LIFO system prefer specific-goods pooled LIFO approach over dollar-value LIFO
• C) It usually results in large LIFO liquidation
• D) The reduction of one quantity in the pool may be offset by an increase in another

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Definitions:

Discount Rate

Within DCF analysis, it's the rate employed to compute the present economic value of expected future cash inflows.

Present Value

The current value of a future sum of money or stream of cash flows, discounted at a specific interest rate.

Compound Rate

The rate at which interest on an investment or loan is calculated on both the initial principal and the accumulated interest from previous periods.

Time Value of Money

The concept that a sum of money is worth more now than the same amount in the future due to its potential earning capacity.