Henri Company Uses the Average-Cost Inventory Method

question 58

Multiple Choice

Henri Company uses the average-cost inventory method.Its 2010 ending inventory was €40,000, but it would have been €60,000 if FIFO had been used.Thus, if FIFO had been used, Henri's income before income taxes would have been

• A)€20,000 greater.
• B)€20,000 less.
• C)the same.
• D)not determinable without the tax rate.

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Definitions:

Motivation

The internal drive or desire that propels an individual to take actions towards goals.

Faulty Cognitions

Faulty Cognitions are distorted or irrational thoughts that can lead to erroneous beliefs and negative behavior patterns.

Irrational Beliefs

Thoughts that are not based on reality or logical reasoning, often leading to negative emotions.

Ellis

Referring to Albert Ellis, a psychologist known for developing Rational Emotive Behavior Therapy (REBT), which focuses on identifying irrational beliefs to change emotional and behavioral responses.