Accounting Procedures Allow a Business to Evaluate Their Inventory at LIFO

question 38

Multiple Choice

Accounting procedures allow a business to evaluate their inventory at LIFO (Last In First Out) or
FIFO (First In First Out) . A manufacturer evaluated its finished goods inventory (in $1000) for five
Products both ways. Based on the following results, is LIFO more effective in keeping the value of
His inventory lower?
What is the null hypothesis?

• A) µF = µL, or µd = 0
• B) µF ≠ µL, or µd ≠ 0
• C) µF ≤ µL
• D) µF > µL

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Definitions:

Preferences

Indications of the choices or selections made by individuals or groups based on tastes, likes, or desires, often influencing decision-making.

Condorcet Voting Paradox

A situation in social choice theory where collective preferences can be cyclic (i.e., not transitive), even if the individual preferences of voters are not.

Transitivity

In decision theory, the principle that if preference A is greater than B, and B is greater than C, then A is greater than C.

Arrow's Impossibility Theorem

A theorem that demonstrates the impossibility of devising a social welfare function that satisfies all of a specified set of reasonable conditions simultaneously.