If a Company Uses the LIFO Cost Flow Assumption on Its

question 96

Multiple Choice

If a company uses the LIFO cost flow assumption on its federal income tax return in order to minimize its tax payment, then it:

• A)must use LIFO on its financial statements.
• B)must use FIFO on its financial statements.
• C)may use any cost flow assumption permitted by GAAP on its financial statements.
• D)must correct the error at the beginning of the next accounting period.

---

Definitions:

Stereotype Threat

The risk of confirming negative stereotypes about one's group, which can hinder performance and affect behavior.

African Americans

A racial or ethnic group in the United States with ancestry from any of the black racial groups of Africa.

Intelligence Test

Standardized assessments designed to measure human intelligence and cognitive abilities in various domains.

Spatial Skills

The capacity to understand, reason, and remember the spatial relations among objects or space.