If Inventory Levels Are Stable or Increasing an Argument That

question 5

Multiple Choice

If inventory levels are stable or increasing an argument that favors the FIFO method as compared to LIFO is

• A) Income taxes tend to be reduced in periods of rising prices
• B) Cost of goods sold tends to be stated at approximately current cost in the income statement
• C) Cost assignments typically parallel the physical flow of the goods
• D) Income tends to be smoothed as prices change over time

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Definitions:

Great Recession

The Great Recession refers to the severe global economic downturn that occurred from late 2007 through mid-2009, characterized by significant declines in economic activity and employment.

Federal Deficit

The shortfall when a government's total expenditures exceed its total revenues for a fiscal year, leading to borrowing or debt accumulation.

Productivity Growth

An increase in the efficiency of production, measured as the amount of output per unit of input over time.

U.S. Productivity

The measurement of how efficiently goods and services are produced in the United States, often measured as output per hour of labor.