Which of the Following Statements About the Use of the LIFO

question 35

Multiple Choice

Which of the following statements about the use of the LIFO method in Australia is true?

• A) The LIFO method is not allowed to be used for either financial reporting or tax purposes.
• B) The LIFO method may be used for both financial reporting and tax purposes.
• C) The LIFO method may be used for financial reporting but not for tax purposes.
• D) The LIFO method can only be used if approval is received from the Australian Taxation Office.

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Definitions:

Express Promise

A clear and specific commitment stated by one party to another, often forming the basis of an express contract.

Consideration

In contract law, something of value promised, given, or received that motivates parties to enter into an agreement.

Time Draft

A written order to pay a specified amount of money at a future date.

Debtor-Creditor Relationship

A financial relationship where one party (the debtor) owes a debt to another party (the creditor).