Which of the Following Is True Regarding the Use of LIFO

question 77

Multiple Choice

Which of the following is true regarding the use of LIFO for inventory valuation?

• A)If LIFO is used for external financial reporting, then it must also be used for internal reports.
• B)For purposes of external financial reporting, LIFO may not be used with the lower-of-cost-or-net realizable value approach.
• C)If LIFO is used for external financial reporting, then it cannot be used for tax purposes.
• D)None of these.

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Definitions:

Operations

The day-to-day activities involved in running a business, including production, logistics, and distribution.

Cycle Counting

A continuing reconciliation of inventory with inventory records.

Stock Verification

The process of checking and confirming the actual inventory quantities on hand match the recorded inventory levels in an organization's system.

Item Classification

involves categorizing items in inventory or production based on certain criteria such as demand frequency, value, or importance to enable more efficient management and control.