Which of the Following Statements Regarding Inventories Is Correct

question 52

Multiple Choice

Which of the following statements regarding inventories is correct?

• A) FIFO assumes that the costs of the earliest goods acquired are the last to be sold.
• B) It is generally good business management to sell the most recently acquired goods first.
• C) Under FIFO, the ending inventory is based on the latest units purchased.
• D) FIFO seldom coincides with the actual physical flow of inventory.

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Definitions:

Merit Pay

A pay increase given to employees based on their performance, as an incentive to encourage higher productivity and commitment.

Incentive Pay

A form of compensation designed to reward employees for achieving specific goals or exceptional performance.

Performance-Based Systems

Systems that appraise and reward employees based on their performance outcomes or achievements, rather than time spent or seniority.

Monetary Rewards

Financial incentives offered to employees as recognition for their work performance, achievements, or to motivate specific behaviors.