Which Statement Is Correct About Cost Allocation Methods Under GAAP

question 1

Multiple Choice

Which statement is correct about cost allocation methods under GAAP?

• A)LIFO method expenses the oldest costs first.
• B)LIFO method has the most recent costs on the balance sheet.
• C)LIFO method has the most recent costs in the income statement.
• D)LIFO is an acceptable cost allocation method.

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Definitions:

Not-for-Profit Organization

An organization that operates for purposes other than making a profit, often focusing on social, educational, or charitable objectives.

Military Organization

An entity structured to use armed forces for purposes of defense, security, or warfare operations.

S Corporation

A type of corporation in the United States that is taxed under Subchapter S of the Internal Revenue Code, with profits passing through to shareholders to be taxed at individual income tax rates.

Sole Proprietorship

A business owned and operated by a single individual, with no separation between the business and the owner, legally or financially.