Which of the Following Statements Are TRUE

question 111

Multiple Choice

Which of the following statements are TRUE?

• A)An increase in tax rates will increase the demand for Treasury bonds,lowering their interest rates.
• B)Because the tax-exempt status of municipal bonds was of little benefit to bond holders when tax rates were low,they had higher interest rates than U.S. government bonds before World War II.
• C)Interest rates on municipal bonds will be higher than comparable bonds without the tax exemption.
• D)Because coupon payments on municipal bonds are exempt from federal income tax,the expected after-tax return on them will be higher for individuals in lower income tax brackets.

Apply cost flow assumptions (FIFO, LIFO, Average Cost) in determining inventory value and cost of goods sold.

Understand the application of the lower of cost or net realizable value (LCNRV) rule on ending inventory.

Grasp the concept of the LIFO reserve and its effects on converting LIFO to FIFO.

Understand the impact of inventory errors on net income, assets, and stockholders' equity.

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Definitions:

Long-Run Effect

The ultimate impact of economic policies or market changes, characterized by all inputs and outputs being variable and firms fully adjusting to new conditions.

Tariff on Imports

A levy placed on imported goods and services by a government to shield local industries from overseas competition.

Total Output

The complete quantity of goods or services produced by a company, sector, or economy within a specific timeframe.

Exports

Sales of goods or services produced in one country purchased by residents of another country.