Company a Uses the FIFO Inventory Method and Company B

question 68

Multiple Choice

Company A uses the FIFO inventory method and Company B uses the LIFO method.If prices are rising and there are no other significant differences between the companies,which of the following is correct?

• A)Company A will report a higher current ratio and lower earnings per share than Company B.
• B)Company A will report a higher current ratio and higher earnings per share than Company B.
• C)Company A will report a lower current ratio and higher earnings per share than Company B.
• D)Company A will report a lower current ratio and lower earnings per shares than Company B.

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Definitions:

Supply Chain

The entire process of making and selling commercial goods, including raw materials sourcing, manufacturing, distribution, and sales.

Small Players

Companies or entities that have a minor share in a market or industry, typically characterized by smaller teams, budgets, or influence.

Response Time

The duration between when a request is made and when the response is received.

Facilities

Physical locations like factories, warehouses, and distribution centers involved in the production, storage, and distribution of goods in a supply chain.