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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:

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Suggested Answer: B

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

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Simona
2 months ago
Ah, the age-old battle of FIFO vs. LIFO. I wonder if they'll ever make a reality show out of it - 'Inventory Valuation Wars' or something.
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Ashley
27 days ago
C) It approximates the physical flow of goods.
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Louann
29 days ago
B) It generates the highest profit when prices are rising.
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Eric
1 months ago
A) It values inventory close to current replacement cost.
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Roy
2 months ago
Wait, so FIFO is like a first-class citizen in the inventory method family? Guess I better not use LIFO, or I'll be in the doghouse!
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Daniela
2 months ago
C is the obvious answer. FIFO approximates the physical flow of goods - that's like Inventory Accounting 101.
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Rozella
2 months ago
Hmm, I was confident it was D, but now I'm second-guessing myself. FIFO minimizing taxes? That doesn't sound right.
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Cyndy
12 days ago
Eileen: Maybe it's not D, minimizing current-period income taxes. Let's reconsider.
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Marleen
12 days ago
User 3: I'm not sure, but I think it's C, approximates the physical flow of goods.
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Eileen
1 months ago
User 2: Eileen, I believe it's B, generates the highest profit when prices are rising.
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Selma
2 months ago
User 1: I think it's A, values inventory close to current replacement cost.
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Owen
2 months ago
B is the correct answer. FIFO generates the highest profit when prices are rising, not the lowest.
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Sheron
3 months ago
Hmm, that makes sense. But I still think D) is the correct answer because it helps in tax savings.
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Carman
3 months ago
I disagree, I believe the answer is A) It values inventory close to current replacement cost.
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Cheryl
3 months 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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Meghann
2 months ago
Right, C is the only option left. FIFO does approximate the physical flow of goods.
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Arthur
2 months ago
That makes sense. B is also true, FIFO generates the highest profit when prices are rising.
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Eric
2 months ago
That's right, A is not true for FIFO method.
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Jose
2 months ago
So, the correct answer must be D then. FIFO does minimize current-period income taxes.
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Eric
2 months ago
I agree, A is incorrect because FIFO values inventory close to historical cost.
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Zena
2 months ago
I agree, A is incorrect. FIFO values inventory close to historical cost.
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Sheron
3 months ago
I think the answer is D) It minimizes current-period income taxes.
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