During a Period of Consistently Rising Prices, the Method of Inventory

question 109

Multiple Choice

During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of merchandise sold is

• A) FIFO
• B) LIFO
• C) average cost
• D) weighted average

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Definitions:

Reasonable Consumer

A legal standard referring to a hypothetical person who is considered average or typical from the perspective of the consumer population, used in cases related to consumer protection and advertising.

Mislead

To guide someone into a wrong direction or give someone a wrong idea or impression.

Cooling-Off Rule

A federal regulation allowing consumers a set period of time to cancel contracts or purchases made at home or at locations other than the normal business premises of a company.

Federal Trade Commission

A federal agency established to protect consumers and ensure a strong competitive market by enforcing antitrust and consumer protection laws.