When the Cost of Raw Materials Is Increasing, FIFO Accounting

question 55

Multiple Choice

When the cost of raw materials is increasing, FIFO accounting

• A)yields higher ending inventory values than LIFO.
• B)produces higher unit sales than using LIFO.
• C)yields higher cost of goods sold than LIFO.
• D)All of the options.

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Definitions:

Increase

To become or cause to become greater in size, amount, number, or degree.

Consumer Incomes

The total amount of income received by consumers, influencing their purchasing power and demand for goods and services.

Inferior Good

A type of good for which demand decreases as the income of the consumer increases, contrasting with normal goods.

Substitute

A good or service that can be used in place of another good or service, often due to similarities in features or functions.