When Prices Are Falling, Valuing Inventory Using the LIFO Method

question 24

Multiple Choice

When prices are falling, valuing inventory using the LIFO method rather than FIFO gives:

• A) inventory a higher value but lowers net income.
• B) inventory a lower value and also lowers net income.
• C) both inventory and net income a higher value.
• D) inventory a lower value and net income a higher value.

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Definitions:

Overtime

refers to time worked by an employee beyond their regular working hours, typically compensated at a higher rate.

Private Bill

A proposal for a law that would apply to a particular individual or group of individuals, or corporate entity, unlike public bills which apply to everyone within their jurisdiction.

Citizenship

The status of being a citizen, entailing specific rights, duties, and privileges; typically involves a legal relationship between an individual and a nation-state.

Foreign Country

A nation that is located outside of one's own country's boundaries.