Changing from the LIFO (Last-In,First-Out)to Specific-Identification Method of Valuing Inventory

question 155

Multiple Choice

Changing from the LIFO (Last-In,First-Out) to specific-identification method of valuing inventory ignores the:

• A) principle of conservatism.
• B) principle of consistency.
• C) principle of disclosure.
• D) concept of materiality.

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Definitions:

Assembly Line

A manufacturing process in which parts are added to a product in a sequential manner using a combination of human and automated processes to complete the product.

Productivity Variables

The three factors critical to productivity improvement—labour, capital, and management.

Labour

The human effort, whether physical or mental, contributed towards the production of goods or services in an economy.

Capital

Financial assets or resources that individuals or organizations use to fund their operations and invest in their businesses.