Generally,which Inventory Costing Method Approximates Most Closely the Current Cost

question 173

Multiple Choice

Generally,which inventory costing method approximates most closely the current cost for each of the following? $\begin{array}{|c|c|c|}\hline & \text { Ending Inventory } & \text { Cost of Goods Sold } \\\hline \text { A) } & \text { FIFO } & \text { LIFO } \\\hline \text { B) } & \text { LFO } & \text { LFO } \\\hline \text { C) } & \text { FIFO } & \text { FIFO } \\\hline \text { D) } & \text { LFO } & \text { FIFO } \\\hline\end{array}$

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Inelastic

Describes a situation where the demand or supply for a good or service is not significantly altered when the price changes.

Elastic

A characteristic of a product or service indicating that a change in price leads to a significant change in the quantity demanded or supplied.

Laffer Curve

An illustration of the relationship between tax rates and tax revenue, suggesting that there is an optimal tax rate that maximizes revenue.

Tax Rate Reductions

A decrease in the percentage at which income or transactions are taxed by governmental authorities.