Summer, Inc

question 219

Multiple Choice

Summer, Inc.has been in business for 20 years.During that time the company has consistently used the LIFO inventory costing method.Because of inflation, prices for merchandise have increased consistently over the 20 years.The company has maintained the same inventory quantities over the 20-year period.Which one of the following statements is true?

• A) Summer, Inc.will have paid more income taxes over the past 20 years than it would have if it had used the FIFO method.
• B) Summer, Inc.'s total net income for the past 20 years is greater than it would have reported using another inventory method.
• C) Summer will have to continue using the LIFO method indefinitely because of generally accepted accounting principles and federal income tax rules.
• D) The ending inventory figure reported on the balance sheet may be significantly lower than its current value.

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Definitions:

Bipolar I Disorder

A mental health disorder characterized by extreme mood swings that include emotional highs (mania) and lows (depression).

Manic Phase

A period of abnormally elevated mood, energy, and activity, often found in bipolar disorder.

Hypomania

A mental state characterized by elevated mood, increased activity or energy levels, and often reduced need for sleep, without the full-blown symptoms of mania.

Ion Activity

The effective concentration of an ion in solution, influenced by interactions with other ions, which affects its ability to participate in chemical reactions and processes.