Which of the Following Is an Advantage for U

question 123

Multiple Choice

Which of the following is an advantage for U.S. companies with international operations to use LIFO for U.S. purposes, as opposed to using FIFO for foreign subsidiaries?

• A) LIFO creates paper profits.
• B) LIFO generally approximates the physical flow of items.
• C) Under LIFO, inventory is less vulnerable to price declines.
• D) LIFO eliminates balance sheet distortion.

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Definitions:

Wage Rate

The standard amount of pay given to workers per unit of time, often per hour or year.

Transfers

Transactions where wealth or income is redistributed from one party to another without any exchange of goods or services, such as grants or social security payments.

Households

Units of one or more persons living together who make joint decisions on consumption, work, and income generation.

Discrimination Coefficient

A measure in economics and social sciences to quantify the degree of discrimination or bias shown towards or against a particular group or individual.