Which of the Following Is Not a Disadvantage of Using

question 58

Multiple Choice

Which of the following is not a disadvantage of using the FIFO cost flow assumption?

• A)creates the highest outflow for income taxes during periods of rising prices
• B)does not match current costs against current revenues
• C)includes all the holding gains in income during periods of rising prices
• D)provides a relevant ending inventory value

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Definitions:

Gross National Income

An economic metric that totals the domestic and foreign output of residents of a country, including product taxes and minus subsidies not included in the valuation of output.

APC

Average Propensity to Consume, which measures the fraction of income spent on consumption out of the total income.

Disposable Income

Financial endowment to households for the purpose of spending and saving after mandatory tax deductions.

Consumption

The use of goods and services by households. It represents the end-use of products and is a primary component of aggregate demand in an economy.