Which of the Following Would Not Be a Reasonable Conclusion

question 33

Multiple Choice

Which of the following would not be a reasonable conclusion when comparing LIFO-FIFO under an inflationary condition?

• A)FIFO generally results in a lower profit than does LIFO.
• B)FIFO reports a higher inventory ending balance.
• C)LIFO results in a lower profit figure than does FIFO.
• D)LIFO would probably be used for inventory that has a high turnover rate because there would be an immaterial difference in the results between LIFO ad FIFO.
• E)The cash flow under LIFO is greater than the cash flow under FIFO by the difference in the resulting tax between the two methods.

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Definitions:

Issues Management

The process by which an organization identifies and resolves issues that could potentially harm its reputation or financial health.

Early Warning

A proactive measure or system designed to alert individuals or groups to potential risks, threats, or undesirable outcomes, allowing for preventative action.

Emerging Trends

New patterns or developments gradually becoming prominent in a specific field, often indicating future directions or innovations.

Issue Management

The process of identifying, managing, and mitigating problems or opportunities that could impact an organization.