A Method of Valuing Inventory Based on the Assumption That

question 98

Multiple Choice

A method of valuing inventory based on the assumption that the oldest goods will be sold first is called the:

• A)LIFO method.
• B)average cost method.
• C)specific cost method.
• D)FIFO method.

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Definitions:

Interest-Burden Ratio

A financial ratio indicating the proportion of profits remaining after paying interest expenses, used to measure a company's ability to manage its interest obligations.

Profit Margin

A financial ratio indicating the percentage of revenue that exceeds the cost of goods sold, representing the proportion of each dollar of revenue that constitutes net profit.

ROA

Return on Assets, a financial ratio indicating how profitable a company is relative to its total assets.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that companies use for financial reporting.