Summer, Inc

question 99

Multiple Choice

Summer, Inc.has been in business for 20 years.During that time the company has consistently used the LIFO inventory costing method.Because of inflation, prices for merchandise have increased consistently over the 20 years.The company has maintained the same inventory quantities over the 20-year period.Which one of the following statements is true?

• A)Summer, Inc.'s total net income for the past 20 years is greater than it would have reported using another inventory method.
• B)Summer, Inc.will have paid more income taxes over the past 20 years than it would have if it had used the FIFO method.
• C)Summer will have to continue using the LIFO method indefinitely because of generally accepted accounting principles and federal income tax rules.
• D)The ending inventory figure reported on the balance sheet may be significantly lower than its current value.

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Definitions:

Circadian Rhythm

The natural, internal process that regulates the sleep-wake cycle and repeats roughly every 24 hours.

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Biological processes that display an endogenous, entrainable oscillation of about 24 hours, affecting sleep patterns, hormone release, and other bodily functions.

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Living organisms belonging to the kingdom Plantae that typically produce their own food through photosynthesis and have cell walls.

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Substances that reduce the activity of the central nervous system, often used to induce calmness, reduce anxiety, or promote sleep.