Accounting Procedures Allow a Business to Evaluate Their Inventory at LIFO

question 88

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 decision at the 5% level of significance?

• A) Looking at the large P-value of .2019 we conclude LIFO is more effective.
• B) Reject the null hypothesis and conclude LIFO is more effective.
• C) Reject the alternate hypothesis and conclude LIFO is more effective.
• D) The large P-value of .2017 indicates that there is a good chance of getting this sample data when the two methods are in fact not significantly different, so we conclude that LIFO is

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Definitions:

Arrested Growth

A halt or significant slowdown in the development or expansion of something, often due to external factors.

Pottery

The craft or profession of making objects from clay, which are then hardened by heat, widely used for cooking, storage, and decorative purposes throughout human history.

Sedentary Society

A society whose members settle in one place, establishing permanent homes and communities, as opposed to nomadic lifestyles.

Neolithic Transition

The period marking the shift from hunter-gatherer societies to agricultural communities, leading to the development of settled life and the beginnings of civilization.