Accounting Procedures Allow a Business to Evaluate Its Inventory Costs

question 18

Multiple Choice

Accounting procedures allow a business to evaluate its inventory costs based on two methods: LIFO (last in first out) or FIFO (first in first out) . A manufacturer evaluated its finished goods inventory (in $000s) for five products with the LIFO and FIFO methods. To analyze the difference,they computed FIFO − LIFO for each product. Based on the following results,does the LIFO method result in a lower cost of inventory than the FIFO method? What is the decision at the 5% level of significance?

• A)Fail to reject the null hypothesis and conclude LIFO is more effective.
• B)Reject the null hypothesis and conclude LIFO is more effective.
• C)Reject the alternate hypothesis and conclude LIFO is more effective.
• D)Fail to reject the null hypothesis.

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Definitions:

Strength Training

A form of physical exercise specializing in the use of resistance to induce muscular contraction, which builds the strength, anaerobic endurance, and size of skeletal muscles.

Aerobic

Pertains to processes or activities that require the presence of oxygen, often related to exercise that improves cardiovascular health.

Low-Impact

Refers to activities or actions that cause minimal stress or damage to the body or environment.

Resistance

The refusal to accept or comply with something; the attempt to prevent something by action or argument.