The Impact of Using LIFO Over FIFO Is to ________

question 64

Multiple Choice

The impact of using LIFO over FIFO is to ________.

• A) bias ROE downward since investments are undervalued
• B) bias ROE downward since investments are overvalued
• C) bias ROE upward since investments are undervalued
• D) bias ROE upward since investments are overvalued

---

Definitions:

Stock Dividends Distributable

A portion of a company's earnings allocated to shareholders in the form of additional shares, rather than cash, typically at a fixed rate.

Retained Earnings

The portion of net income that is retained by a company rather than distributed to its shareholders as dividends.

Dividends Declared

Profit distributed by a company to its shareholders, typically in the form of cash or additional stock, based on the number of shares owned.

Stock Split

A stock split is an action taken by a company to divide its existing shares into multiple ones to boost the liquidity of the shares, without changing the overall value of shareholders' equity.