When Costs to Purchase Inventory Are Rising,using LIFO Leads to Reporting

question 33

Multiple Choice

When costs to purchase inventory are rising,using LIFO leads to reporting ______ cost of goods sold and ______ net income than FIFO.

• A) higher; lower
• B) higher; higher
• C) lower; lower
• D) lower, higher

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Definitions:

Corporate Profits

The earnings of a company after all expenses have been deducted from revenues, indicating the financial health and success of the business.

Procurement Agreement

A contract between two parties where one agrees to supply goods or services to the other, often used in business and government transactions.

Voluntary Enforcement

The practice of adhering to rules or agreements based on personal or organizational choice rather than legal obligation.

Labor Standards

Regulations and policies establishing minimum requirements for working conditions, including wages, working hours, safety, and health protections.