A Company That Uses the Last-In, First-Out (LIFO) Method of Inventory

question 104

Multiple Choice

A company that uses the last-in, first-out (LIFO) method of inventory pricing finds at an interim reporting date that there has been a partial liquidation of the base period inventory level. The decline is considered temporary and the partial liquidation is expected to be replaced prior to year end. The amount shown as inventory at the interim reporting date should

• A) be shown at the actual level, and cost of sales for the interim reporting period should include the expected cost of replacement of the liquidated LIFO base.
• B) be shown at the actual level, and cost of sales for the interim reporting period should reflect the historical cost of the liquidated LIFO base.
• C) not give effect to the LIFO liquidation, and cost of sales for the interim reporting period should reflect the historical cost of the liquidated LIFO base.
• D) be shown at the actual level, and the decrease in inventory level should not be reflected in the cost of sales for the interim reporting period.

---

Definitions:

Prenatal Care

Medical and healthcare provided to women during pregnancy aimed at ensuring a healthy pregnancy and childbirth.

Prepregnancy Weight

The body weight of a woman before becoming pregnant, often used as a baseline for monitoring weight changes during pregnancy.

Drug Use

The consumption of substances that affect the psychological or physical state of an individual, which can include legal prescriptions, over-the-counter medications, and illegal substances.

Bicycle Style

A term used to describe the design, aesthetic, and functional aspects of a bicycle, which can vary based on the intended use such as road, mountain, or urban cycling.