In a Period of Increasing Prices, Which Inventory Flow Assumption

question 161

Multiple Choice

In a period of increasing prices, which inventory flow assumption will result in the lowest amount of income tax expense?

• A)FIFO
• B)LIFO
• C)Average cost method
• D)Income tax expense for the period will be the same under all assumptions.

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Definitions:

Carbon

A chemical element with symbol C, known for its ability to form a vast number of compounds, more than any other element, due to its four valence electrons.

Hydrogen Atoms

The simplest and most abundant atom in the universe, consisting of one proton and one electron.

Covalent Bond

A type of chemical bond where two atoms share one or more pairs of valence electrons to achieve stability.

Intermolecular

Relating to or occurring between molecules, such as forces that govern the interactions and phase changes of substances.