The Size of the Divergence Between FIFO Cost of Goods

question 93

Multiple Choice

The size of the divergence between FIFO cost of goods sold and replacement cost of goods sold depends on the rapidity of the inventory turnover and the

• A)change in accounts receivable turnover.
• B)divergence of total asset turnover from previous periods.
• C)severity of input cost change.
• D)rapidity of fixed asset turnover.

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Definitions:

Regression Coefficient

A coefficient in a regression equation that represents the degree of change in the dependent variable for a one-unit change in an independent variable.

Durbin-Watson Statistic

A test statistic used to detect the presence of autocorrelation in the residuals from a regression analysis.

Critical Values

Critical values are specific points on the scale of a statistical distribution that are used to determine the threshold at which the null hypothesis of a test can be rejected.

Positive Autocorrelation

Occurs when a variable's current value is positively related to its past values in a time series.