The Income Taxes Saved by Using LIFO Instead of FIFO

question 107

Multiple Choice

The income taxes saved by using LIFO instead of FIFO are equal to ________.

• A) the tax rate times the change in the ending inventory from last year to the current year
• B) the tax rate times the cost to retail ratio
• C) the tax rate times the LIFO reserve
• D) the tax rate times the change in the LIFO reserve

---

Definitions:

Flexor Digitorum Longus

A muscle in the lower leg that flexes the toes and helps in walking.

Tibialis Anterior

A muscle in the lower leg that is involved in dorsiflexion and inversion of the foot.

Fibularis Brevis

A muscle located on the lateral part of the lower leg, involved in plantar flexion and eversion of the foot.

Extensor Digitorum Longus

A muscle in the leg that helps in extending the toes and dorsiflexing the foot.