When Comparing the FIFO and LIFO Inventory Methods

question 162

Multiple Choice

When comparing the FIFO and LIFO inventory methods:

• A) LIFO values inventory at the newest costs.
• B) LIFO reports the most up-to-date inventory cost on the balance sheet.
• C) FIFO results in the most realistic net income figure.
• D) FIFO matches old inventory costs against revenue.

---

Definitions:

Reflex

It is an involuntary, immediate response to a specific stimulus without conscious thought.

Classical Conditioning

A learning mechanism where the consistent association of two stimuli leads to a response, initially evoked by the second stimulus, being evoked by the first stimulus alone over time.

Extinction

In psychology, the gradual weakening and disappearance of a conditioned response when the conditioned stimulus is no longer paired with the unconditioned stimulus.

Discrimination

Unjust or prejudicial treatment of different categories of people, especially on the grounds of race, age, or sex.