In a Period of Rising Prices,use of the FIFO Cost

question 104

True/False

In a period of rising prices,use of the FIFO cost flow method would cause a company to pay more income taxes than would use of LIFO.

---

Definitions:

Annual Depreciation

Definition: The portion of the cost of a fixed asset that is expensed on an annual basis through the process of depreciation.

Book Value

The net value of a company's assets minus its liabilities, often used to assess the financial health of a business.

Double-Declining-Balance Method

An accelerated method of depreciation that doubles the normal depreciation rate.

Journal Entry

A record of a transaction in the accounting journal that may affect one or more accounts.