Accounting Procedures Allow a Business to Evaluate Its Inventory Costs

question 22

Multiple Choice

Accounting procedures allow a business to evaluate its inventory costs based on two methods: LIFO (Last In First Out) or FIFO (First In First Out) . A manufacturer evaluated its finished goods inventory (in $000s) for five products with the LIFO and FIFO methods. To analyze the difference, they computed (FIFO - LIFO) for each product. Based on the following results, does the LIFO method result in a lower cost of inventory than the FIFO method? What is the value of calculated t?

• A) +0.933
• B) ±2.776
• C) +0.47
• D) -2.028

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Definitions:

Dorsal Surface

The dorsal surface refers to the back side of an organism or the upper side of body parts that lie horizontally.

Ventral Surface

The front or abdomen side of the body in animals; opposite of dorsal.

Midline

An imaginary line that divides the body into equal right and left halves.

Underlying Fascia

The connective tissue located beneath the skin and muscles, which encloses and separates muscle layers, providing structural support and facilitating movement.