Use of the LIFO Method Has Been Deemed Unacceptable Under

question 2

Multiple Choice

Use of the LIFO method has been deemed unacceptable under AASB 102 because:

• A) It presents too many options to report preparers and may confuse them.
• B) This method allows profits to be manipulated by purchasing items at year's end even though they have not been sold.
• C) It can result in higher cost of goods sold figures and therefore lower taxes.
• D) This method did reflect the actual physical flow of inventories.

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Definitions:

Drafting Rules

Regulations or guidelines followed when creating official documents, legislation, or technical drawings.

Contract Dispute

A disagreement between parties regarding the terms, interpretation, or performance of a contract.

Physical Examination

A thorough medical check-up performed by a healthcare professional to assess an individual's health status.

Formal Criminal Charges

Official accusations made by a governmental authority asserting that someone has committed a crime, leading to a legal process.