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:

Seasonal Pattern

A pattern in data that repeats itself at regular intervals due to seasonal factors.

Daily Sandwich Sales

Daily Sandwich Sales represent the number of sandwiches sold by an establishment or tracked within a particular time frame, often used for inventory and marketing analysis.

Sandwich Shop

A food establishment specializing in making and selling sandwiches to customers, often featuring a variety of ingredients and bread types.

Exponential Smoothing

Exponential Smoothing is a technique used in time series analysis to smooth data points by giving more weight to recent observations while exponentially decreasing the weights for older observations.