A Disadvantage of the LIFO Method Is ________

question 88

Multiple Choice

A disadvantage of the LIFO method is ________.

• A)it permits management to influence net income by the timing of the purchase of inventory items
• B)it leads to higher net income than FIFO under inflation
• C)it leads to higher gross profit than FIFO under inflation
• D)none of the above

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Definitions:

Financial Assets

Economic resources or ownership rights that are intangible and represent a claim to future payments, such as stocks, bonds, or bank deposits.

Aggregate Supply Curve

A graph showing the relationship between the total quantity of goods and services that producers are willing to supply at different price levels.

Cyclical Unemployment

Unemployment that results from business cycle fluctuations in the economy, typically increasing during recessions and decreasing during expansions.

Idle Capacity

The portion of a business's resources that is not being utilized to its full potential in production or service delivery.