The Managers of Hong Company Receive Performance Bonuses Based on the Net

question 34

Multiple Choice

The managers of Hong Company receive performance bonuses based on the net income of the firm.Which inventory costing method are they likely to favor in periods of declining prices?

• A)LIFO
• B)Average-Cost
• C)FIFO
• D)Physical inventory method

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Definitions:

Compensatory Damages

Financial reparations awarded to a plaintiff to compensate for loss, injury, or harm suffered due to the defendant's actions.

Breaching Party

The entity or individual that fails to fulfill their contractual obligations, thereby violating the contract.

Technical Injury

A legal injury claimed in a lawsuit, often without tangible harm, based on a technical violation of a statute or regulation.

Actual Damage

Financial loss or harm that can be quantified or specifically identified, resulting from the breach of a legal duty or infringement of rights.