All of the Following Are Reasons for Choosing the FIFO

question 95

Multiple Choice

All of the following are reasons for choosing the FIFO versus the LIFO costing method EXCEPT that:

• A)FIFO reports the most up-to-date inventory values on the balance sheet.
• B)FIFO generally results in higher net income in period of rising prices.
• C)FIFO uses more current costs in calculating the value of ending inventory.
• D)FIFO results in lower income taxes.

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Definitions:

Income

The monetary payment received by an individual or household from various sources like work, investments, or transfers, over a specified period.

Consumer's Surplus

The difference between the total amount consumers are willing and able to pay for a good or service and the total amount they actually pay.

Demand Function

The demand function is a mathematical representation that describes the quantity of a good that consumers are willing and able to purchase at various prices.

Mead

A drink made by the fermentation of honey and water, often enhanced with the addition of fruits, spices, grains, or hops to create an alcoholic beverage.