If Prices of Inventory Are Unchanged Throughout the Year, LIFO

question 351

True/False

If prices of inventory are unchanged throughout the year, LIFO and FIFO inventory valuation methods will produce the same reported net income.

---

Definitions:

Doubtful Accounts

Accounts receivable that a company does not expect to collect in full, often leading to an allowance for doubtful accounts as a contra asset on the balance sheet.

Allowance Method

An accounting technique used to manage accounts receivable and bad debt expense by estimating uncollectible accounts at the end of each period.

Net Income

The total revenue of a business minus total expenses, representing the profit made during a specific period.

Uncollectible Receivables

Accounts receivable that are considered to be uncollectable and are treated as a loss because payment is no longer expected.