Companies That Choose to Use FIFO Must Report in the Financial

question 66

True/False

Companies that choose to use FIFO must report in the financial statement notes what their inventory balance would have been had they used LIFO.

---

Definitions:

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the appropriate years.

Interest Income

Income earned from investments such as savings accounts, bonds, or loans, usually calculated as a percentage of the principal amount.

Interest Receivable

The amount of interest that has been earned but not yet received in cash or recorded by the recipient company.

Effective Interest Rate

The real rate of interest earned or paid on an investment, loan, or other financial product, accounting for the effects of compounding.