The Accountant at Paige Company Is Figuring Out the Difference

question 107

Multiple Choice

The accountant at Paige Company is figuring out the difference in income taxes the company will pay depending on the choice of either FIFO or LIFO as an inventory costing method. The tax rate is 30% and the FIFO method will result in income before taxes of $5,460. The LIFO method will result in income before taxes of $4,935. What is the difference in tax that would be paid between the two methods?

• A) $525.
• B) $225.
• C) $158.
• D) Cannot be determined from the information provided.

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Definitions:

Negative Reinforcement

A process in behavioral psychology where the removal of an undesirable outcome or stimulus increases the likelihood of a behavior being repeated.

Punishment

The imposition of a penalty as retribution for an offense, with the aim of correcting behavior or serving as a deterrent.

Scapegoat

A person or group unfairly blamed for problems or issues, often as a means of deflecting responsibility or criticism.

Alleviate Apprehension

To reduce feelings of anxiety, worry, or fear, making someone less anxious or fearful.