When a Company Uses LIFO for External Reporting Purposes and FIFO

question 146

Multiple Choice

When a company uses LIFO for external reporting purposes and FIFO for internal reporting purposes, an Allowance to Reduce Inventory to LIFO account is used. This account should be reported

• A) on the income statement in the Other Revenues and Gains section.
• B) on the income statement in the Cost of Goods Sold section.
• C) on the income statement in the Other Expenses and Losses section.
• D) on the balance sheet in the Current Assets section.

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