During a Year of Rising Prices and Increasing Inventory, Which

question 39

Multiple Choice

During a year of rising prices and increasing inventory, which cost flow assumption would measure the smallest working capital ratio?

• A) FIFO
• B) LIFO
• C) Averaging
• D) Working capital is not sensitive to inventory cost flow assumptions.

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Definitions:

Notify

To inform or give notice to someone about specific information or an event.

Forgery

The process of making, adapting, or imitating objects, statistics, or documents with the intent to deceive.

Bank Statement

A document or electronic record issued by a bank detailing the transactions in a customer's account over a specific period.

Oral Stop Payment Order

A verbal instruction to a financial institution to not pay out or process a specific check or transaction.