Fte Following Statements About LIFO Inventory Are False Except

question 16

Multiple Choice

fte following statements about LIFO inventory are false except:

• A) fte taxpayer needs IRS permission to adopt LIFO.
• B) LIFO must be used for both "book" and tax purposes, but the numbers may still differ.
• C) fte use of LIFO results in tax deferral and increased earnings per share per books.
• D) LIFO was not acceptable for tax purposes until the 1954 Internal Revenue Code.

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Definitions:

Expense Account

An account that tracks the costs incurred by a company in its operational activities.

Asset Account

An asset account is a category in accounting that represents resources owned or controlled by a company that have future economic value.

Five-Step Model

A framework used in revenue recognition, specifying the steps to be followed to accurately recognize revenue according to accounting standards.

Transaction Price

The amount of consideration expected to be received from a customer in exchange for transferring goods or services.