If a Company Is Utilizing LIFO Inventory Costing, What Might

question 39

Multiple Choice

If a company is utilizing LIFO inventory costing, what might be the effect on the calculation of Cost of Goods sold in an interim financial statement?

• A)​cost of goods sold is calculated on a historical cost basis only
• B)​the interim cost of goods sold includes the replacement cost of temporarily liquidated inventory
• C)​cost of goods sold is not adjusted for any changes due to liquidation of LIFO inventory
• D)​any of the effects of liquidation are deferred until year end

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Definitions:

Incremental Change

Gradual modifications or improvements made over time to processes, products, or systems.

Wheel of Innovation

A conceptual model outlining the cyclical process of innovation, from idea generation through to implementation and market introduction.

Experimenting

The process of carrying out trials or tests to discover, prove, or evaluate the effectiveness or truth of something.

Feasibility

The measure of how possible or practical the implementation of a project, plan, or process is, usually considering economic, technical, and logistical factors.