In a Period of Rising Prices,the Use of Which of the Following

question 30

Multiple Choice

In a period of rising prices,the use of which of the following cost flow methods would result in the highest tax liability?

• A)LIFO
• B)FIFO
• C)Weighted average cost
• D)Moving average cost

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Definitions:

Disbursements Schedule

A plan that outlines the expected payments to be made by an organization over a specified period.

Production Budget

An estimation of the number of units that must be produced in a given period to meet both sales and inventory needs.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.