Using the Following Data, by How Much Would Taxable Income

question 31

Multiple Choice

Using the following data, by how much would taxable income change if LIFO is used rather than FIFO?

• A)There is no difference.
• B)Increase by $40,000.
• C)Decrease by $40,000.
• D)Decrease by $70,000.

---

Definitions:

Implied Warranty

A legal term for the assurance that a product is fit for its intended purpose, even if not explicitly stated at the time of sale.

Commercial Purposes

Activities or transactions conducted with the goal of generating profit or involving the buying and selling of goods and services.

Implied Warranties

Warranties that are not expressly stated but are assumed by law to exist in a sales contract to protect the buyer.

Common Law

A legal system grounded in established precedents and traditions, not on written statutes.