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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Definitions:

La Piana Consulting

A consulting firm specializing in strategic solutions for nonprofits and foundations.

Cross-Sector Collaboration

Partnerships between organizations from different sectors (public, private, nonprofit) to address common challenges through shared resources and goals.

Nonprofit Organization

An organization dedicated to furthering a social cause or shared goal, without the primary aim of making a profit for shareholders or owners.

Public Organization

An organization established and funded by the government to serve the public interest and provide services not typically offered by private entities.