If a Company Uses Periodic Inventory and FIFO When Prices

question 27

Multiple Choice

If a company uses periodic inventory and FIFO when prices are falling, the effect will:

• A)reduce cost of goods sold.
• B)increase the inventory ending balance on the balance sheet.
• C)reduce the gross margin.
• D)increase the gross margin.

Distinguish between automatic stabilizers and discretionary fiscal policies.

Recognize the effects of fiscal policy on recession and inflation.

Understand the implications of government expenditures and tax receipts on public debt.

Identify the objectives of stabilization policies.