In a Period of Rising Prices, the Effect of Selecting

question 22

Multiple Choice

In a period of rising prices, the effect of selecting the FIFO rather than the LIFO method of inventory valuation results in:

• A) a higher days' sales in inventory.
• B) a lower return on sales.
• C) a lower days' sales in inventory.
• D) a higher days' sales in receivables.

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Definitions:

Unilateral Contract

A contract in which one party makes a promise in exchange for the other party's act, rather than a promise in return.

Gratuitous Promise

A promise made without requiring some benefit or thing of value in return; not enforceable as a contract because it lacks consideration.

UCC

The Uniform Commercial Code, a comprehensive set of laws governing commercial transactions in the United States, intended to standardize and simplify the law across jurisdictions.

Renunciation

The formal rejection of a claim, right, or possession, usually involving a legal or official declaration.