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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Definitions:

Right Words

Choosing the most accurate and appropriate words for effective communication.

Communication Process

The series of steps and elements involved in the effective exchange of information between two or more parties.

Determines

To establish something exactly, typically after a calculation, investigation, or process of reasoning.

Encodes

The process of converting information into a particular form, especially for communication or storage.