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.

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Definitions:

Internal Improvements

Public works projects, such as roads and canals, intended to enhance the transportation network and economic development within a country.

Northern and Southern Railroads

Refers to the network of railroads that were developed in the Northern and Southern regions of the United States, having different infrastructure and impacts on their respective economies and ways of life.

Fewer Taxes

Implies a reduction in the amount of taxes imposed on individuals or businesses, which can affect economic behavior and investment decisions.

Market Economy

A market economy is an economic system in which supply and demand from consumers drive the production of goods and services.