Three Icebergs Are Each Floating in Bathtubs Filled to the Brim

question 39

Multiple Choice

Three icebergs are each floating in bathtubs filled to the brim with water. Iceberg A has large air bubbles in it. Iceberg B has unfrozen water in it. Iceberg C has an iron railroad spike in it. When the ice melts, what happens?

• A) The water level in C will decrease while the other two water levels will remain the same.
• B) The water level in A will stay the same, while the other tubs will spill over.
• C) Only the water in C will spill over.
• D) All the tubs spill over.
• E) All stay exactly the same.

---

Definitions:

Specific Identification

An inventory valuation method in which the cost of each specific item in inventory is tracked and used to calculate cost of goods sold.

LIFO

Last In, First Out, a method of inventory accounting where items produced last are considered the first to be sold.

FIFO

FIFO, or First-In, First-Out, is an inventory valuation method where goods first added to inventory are the first to be sold.

IFRS

International Financial Reporting Standards, a set of accounting standards that provide a global framework for how public companies prepare and disclose their financial statements.