Using LIFO to Value Inventory One Year and Using FIFO

question 11

Multiple Choice

Using LIFO to value inventory one year and using FIFO the next is a violation of which accounting principle?

• A)Conservatism
• B)Recognition
• C)Neutrality
• D)Matching
• E)Consistency

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Definitions:

Repossess Property

The act of a lender taking back an object, typically a vehicle or real estate, from the borrower due to failure to meet the terms of the loan agreement.

Bankruptcy Proceedings

The legal process through which individuals or entities that cannot repay debts to creditors seek relief from some or all of their debts.

Debtor

An individual or entity that owes money or other obligations to another party, known as the creditor.

Secured Party

A lender or creditor that has a legal interest in the collateral offered by the debtor to secure a loan or other obligation.