A Company Begins the Year with a Zero Balance in the LIFO

question 5

Multiple Choice

A company begins the year with a zero balance in the LIFO Reserve account. Based on an analysis of LIFO and FIFO, the company determines the LIFO Reserve should be $20,000 at the end of the year? Which journal entry is needed?

• A) Debit Cost of Goods Sold for $20,000 and Credit LIFO Reserve for $20,000.
• B) Debit LIFO Reserve for $20,000 and Credit Cost of Goods Sold for $20,000.
• C) Debit Cost of Goods Sold for $20,000 and Credit Inventory for $20,000.
• D) Debit Inventory for $20,000 and Credit Gain on Inventory for $20,000.

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Definitions:

Closed In-Line Catheter

A medical device designed to provide continuous access to a patient's vascular system without the need to repeatedly puncture the skin, often used in critical care to administer medications or fluids.

Hyperoxygenate

To supply or saturate something, especially the body or part of the body, with an excessive amount of oxygen.

Airway

The part of the respiratory system through which air flows, beginning at the nose and mouth and continuing through the lungs.

Face Shield

Protective gear that covers the face, often used to shield the wearer from bodily fluids or hazardous materials.