Compare the Effects of the Different Costing Methods on the Financial

question 63

Multiple Choice

Compare the effects of the different costing methods on the financial statements
-In order to pay the least income tax possible in periods of decreasing inventory costs, the company should use which of the following inventory costing methods?

• A) FIFO
• B) Perpetual
• C) Average cost
• D) Specific identification
• E) Periodic

---

Definitions:

Dividend Increases

The action of a company raising the amount of dividend payments to its shareholders.

Compromise Policy

A strategy of finding a middle ground between two conflicting positions to resolve a dispute or achieve a mutually acceptable outcome.

Financial Stability

A state in which the financial system, encompassing institutions, markets, and the overall economy, is capable of withstanding shocks without significant disruption.

Low-Dividend Policy

A financial strategy where a company decides to distribute a relatively small portion of its earnings to shareholders in the form of dividends.