The Income Tax Saved by Using LIFO Instead of FIFO

question 114

Multiple Choice

The income tax saved by using LIFO instead of FIFO is equal to the ________ times the income tax rate.

• A)cost of the ending inventory
• B)retail price of the ending inventory
• C)cost of the beginning inventory
• D)LIFO Reserve

---

Definitions:

Incremental Revenues

The additional income generated from a specific action or decision.

Total Company Net Income

The aggregate net income of a company across all its business operations and segments.

Time Value

A concept that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.

Sell Now

A directive or decision to sell an asset or a product immediately, often to capitalize on current market conditions or to avoid future losses.