If, in Year 1, a Company Used LIFO; Year 2

question 65

Multiple Choice

If, in year 1, a company used LIFO; year 2, FIFO; and in year 3, moving average cost for inventory valuation, which of the following assumptions, constraints, or principles would be violated:

• A) cost.
• B) time period.
• C) matching.
• D) consistency.
• E) materiality.

---

Definitions:

Workweek

A fixed, standard period used for labor scheduling and payroll, commonly defined as a set number of hours or days that an employee works.

Adjusting Entry

An accounting journal entry made at the end of an accounting period to allocate income and expenses to the period in which they actually occurred.

Interest Expense

The cost incurred by an entity for borrowed funds, denoted as an expense within the income statement.

Note Payable

A written agreement that represents a promise to pay a specified amount of money on demand or at a designated future date.