Which of the Following Is a Disadvantage to Business of the LIFO

question 40

Multiple Choice

Which of the following is a disadvantage to business of the LIFO method of applying costs to inventory?

• A) It is difficult for a computer program to apply the method.
• B) It understates the balance sheet value for inventory.
• C) Current income is matched with the most recent costs of acquiring goods.
• D) If it is allowed for tax purposes, in times of rising prices it results in less tax being paid in the current period.

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Definitions:

Wilcoxon Signed Rank Test

A non-parametric test used to compare two related samples, matched samples, or repeated measurements on a single sample to assess whether their population mean ranks differ.

Absolute Difference

The non-negative difference between two values, disregarding the direction of difference.

Matched Pairs Studies

A form of experimental design where each subject is paired with a control subject based on certain characteristics, and differences between pairs are analyzed.

Wilcoxon Signed Rank Test

A non-parametric statistical test used to compare two related samples, matched samples, or repeated measurements on a single sample to assess whether their population mean ranks differ.