Companies Can Avoid Paying Income Taxes on Inventory Profits by Using

question 74

Multiple Choice

Companies can avoid paying income taxes on inventory profits by using the ____ inventory valuation method.

• A) LIFO
• B) FIFO
• C) Priced out
• D) Priced in

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Definitions:

Lien

A legal claim or right against property as security for the payment of a debt or fulfillment of an obligation.

Upholstering

Involves covering furniture with padding, springs, webbing, and fabric or leather covers, enhancing its appearance and comfort.

Right of Exoneration

A legal principle that allows a person who has discharged a debt or obligation, which was owed jointly with others, to obtain reimbursement from the other parties responsible for the debt.

Surety

A financial agreement where a third party (surety) guarantees the obligations of a debtor to the creditor, providing assurance that the debtor's obligations will be fulfilled.