Which of the Following Inventory Approaches Is Not in Accord

question 48

Multiple Choice

Which of the following inventory approaches is not in accord with the physical flow of merchandise in most businesses?

• A)LIFO
• B)FIFO
• C)Specific identification
• D)Average cost

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Definitions:

Profitability

The ability of a company to generate earnings as compared to its expenses and other relevant costs incurred during a specific period.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available to fund its operations and growth.

Liquidity

The facility to convert an asset into cash seamlessly without impacting its market rate.

Conceptual Framework

A set of concepts and ideas that guide the development, preparation, and interpretation of financial statements for external users.