IIA Exam IIA-CIA-Part3-3P Topic 12 Question 49 Discussion

Actual exam question for IIA's IIA-CIA-Part3-3P exam

Question #: 49
Topic #: 12

[All IIA-CIA-Part3-3P Questions]

All of the following are true with regard to the first-in, first-out inventory valuation method except:

AIt values inventory close to current replacement cost.

BIt generates the highest profit when prices are rising.

CIt approximates the physical flow of goods.

DIt minimizes current-period income taxes.

Show Suggested Answer

Suggested Answer: B

by Loreta at Jul 16, 2024, 03:05 AM

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2 days ago

Hmm, that makes sense. But I still think D) is the correct answer because it helps in tax savings.

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6 days ago

I disagree, I believe the answer is A) It values inventory close to current replacement cost.

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7 days ago

I think the answer is A. FIFO doesn't value inventory at current replacement cost, that's more of a LIFO thing.

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14 days ago

I think the answer is D) It minimizes current-period income taxes.

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