Assuming Inflation,which of the Following Statements Incorrectly Describes an Attribute

question 31

Multiple Choice

Assuming inflation,which of the following statements incorrectly describes an attribute of,or the relationship among,inventory valuation methods?

• A)Specific identification is used primarily when ending inventory consists of a relatively few but very expensive and distinctive items.
• B)Given inflation and in order to minimize taxes,most firms have tended to switch to LIFO if they had been using FIFO.
• C)LIFO tends to provide ending inventory valuations that closely approximate the actual market value of the inventory at the balance sheet date.
• D)LIFO tends to report current acquisition costs of inventory through cost of goods sold.
• E)Weighted average provides less extreme balance sheet and income statement results than either FIFO or LIFO.

Distinguish between liquidated and unliquidated debts and their implications for consideration.

Understand the legal significance of nominal consideration and its role in contract law.

Assess the legal enforceability of promises in employment contracts and gift promises.

Recognize when consideration is not required for a contract to be legally binding.

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Definitions:

Income Redistribution

A policy aimed at balancing economic inequality by reallocating wealth and income from wealthier segments of society to poorer ones through taxes, welfare systems, or other means.

Social Security Benefit Formula

The calculation used to determine the amount of benefits one receives from the Social Security Administration, based on earnings history and age.

Below-Average Earnings

refer to income levels that are lower than the average earnings within a specified population or employment sector.

Social Security System

A government program that provides financial assistance to people with inadequate or no income, especially the elderly and disabled.