In Periods of Rising Prices, Which Is an Advantage of Using

question 169

Multiple Choice

In periods of rising prices, which is an advantage of using the LIFO inventory costing method?

• A) Ending inventory will include latest (most recent) costs and thus be more realistic.
• B) Cost of goods sold will include latest (most recent) costs and thus will be more realistic.
• C) Net income will be the highest and thus reflect the prosperity of the company.
• D) Phantom profits are reported.

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Definitions:

Partnership

A legitimate enterprise setup in which management duties and profits are divided among two or more persons.

UPA

Uniform Partnership Act; a law that governs the operations of partnerships in the United States.

Capital City Partnership

A collaboration or alliance formed between businesses, government entities, and/or non-profit organizations aimed at promoting economic development in a city's capital area.

Assets Distribution

The process of allocating a company's or estate's assets to creditors, shareholders, or heirs according to legal agreements or laws.