Based on Your Answers to Questions 6 and 7, Which

question 20

Multiple Choice

Based on your answers to Questions 6 and 7, which of the following is a disadvantage of using the IFRS FIFO method, as compared to Average-cost under U.S. GAAP?

• A) Under FIFO, during periods of inflation, inventory costs matched against sales are lower than the inventory replacement cost.
• B) When price levels increase and inventory quantities do not decrease, taxes are greater under FIFO
• C) FIFO may cause poorer buying habits as management attempts to manipulate net income.
• D) FIFO typically causes lower reported earnings.

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Definitions:

Prereproductive

Describes individuals, especially in demographic studies, who are at an age before they are biologically capable of reproducing.

Reproductive

Relating to the process of producing offspring through sexual or asexual means.

Demographic Transition

A model that describes the transformation of a country's population from high birth and death rates to low birth and death rates.

Industrialization

Industrialization refers to the process by which an economy is transformed from primarily agricultural to one based on the manufacturing of goods, leading to technological innovation and changes in society.