Which of the Following Statements Is False

question 2

Multiple Choice

Which of the following statements is false?

• A)Companies do not have to use the same inventory method for all items of inventory.
• B)Companies do not have to consistently use the same inventory costing methods.
• C)Use of the LIFO inventory method during a period of increasing prices may create a conflict of interest between the owners and managers.
• D)A company choosing to maximize stockholders' equity during a period of increasing prices should use the FIFO inventory method.

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Definitions:

Variable Cost

Charges that move in direct relationship with the quantity of goods produced or sold, embracing materials and labor expenses.

Units

Basic measures or quantities of product or service in business, used in accounting and production.

Least-Squares Regression Method

Least-Squares Regression Method is a statistical technique used to determine the line of best fit by minimizing the sum of the squares of the differences between the observed and predicted values.

Cost Behavior

The study of how specific costs respond to changes in the level of business activity, categorized into fixed, variable, and mixed costs.