A Firm Utilizing FIFO Inventory Accounting Would, in Calculating Gross

question 55

Multiple Choice

A firm utilizing FIFO inventory accounting would, in calculating gross profits, assume that

• A) all sales were from current production.
• B) all sales were from beginning inventory.
• C) sales were from beginning inventory until it was depleted, and then use sales from current production.
• D) all sales were for cash.

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Definitions:

Increase in Demand

A shift in the demand curve to the right, signifying that consumers are willing to purchase more of a good or service at the same prices, due to factors like increased income or changes in tastes.

Equilibrium Price

The market price at which the quantity of a good or service demanded equals the quantity supplied, leading to market equilibrium.

Short Run

A period of time during which at least one input in the production process is fixed, limiting the ability of a business to adjust to changes in market demand.

Industry Supply

The aggregate production of goods or services that companies within a particular sector can and want to offer at different pricing points.