The Use of the LIFO Method of Inventory Valuation

question 82

Multiple Choice

The use of the LIFO method of inventory valuation

• A)assigns the cost of the most recent purchases to the ending inventory.
• B)results in the same valuation as the specific identification method in a time of rising prices.
• C)results in the lowest reported net income in a time of rising prices.
• D)results in the highest reported net income in a time of rising prices.

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Definitions:

Federal Depository Bank

A financial institution that is authorized to hold deposits for the Federal Reserve System and process related transactions.

Payroll Taxes

Taxes imposed on employers and employees, calculated as a percentage of the salaries that employers pay their staff, including social security and Medicare taxes in the United States.

Contingent Liabilities

Potential financial obligations that may occur depending on the outcome of a future event.

Future Event

A prospective occurrence or situation that has yet to happen, often considered in planning and strategy contexts.