Which of the Following Statements About the Computation of Cost

question 54

Multiple Choice

Which of the following statements about the computation of cost of goods sold is true?

• A) Manufacturing and retail businesses must use the specific identification method for tax purposes.
• B) Manufacturing and retail businesses must use the FIFO costing convention for tax purposes.
• C) Manufacturing and retail businesses must use the LIFO costing convention for tax purposes.
• D) Manufacturing and retail businesses that use the LIFO costing convention for tax purposes must also use LIFO for book purposes.

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