Asked by David Adamovich on Jul 05, 2024
Verified
Which one of the following is not an advantage of using the FIFO cost flow assumption?
A) produces lowest net income in periods of rising prices
B) provides a relevant ending inventory value
C) is not as susceptible to profit manipulation by management
D) does not produce unusual results when inventory liquidation occurs
FIFO Cost Flow
An inventory valuation method where the cost of the earliest goods purchased are the first to be recognized as cost of goods sold.
Net Income
This refers to the amount of money a company earns after subtracting all its expenses, taxes, and costs from its total revenue.
Ending Inventory Value
The total value of all the goods available for sale at the end of a financial period.
- Explore and critique the strengths and weaknesses of employing LIFO and FIFO strategies in inventory control.
Verified Answer
Learning Objectives
- Explore and critique the strengths and weaknesses of employing LIFO and FIFO strategies in inventory control.
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