Choose the Word or Phrase in [ ] Which Will

question 34

Short Answer

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement.
-There is a [high | low] chance that one's tax return will be audited in a given year.

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Definitions:

LIFO of $450,000

The last-in, first-out method applied to inventory that results in an ending balance of $450,000.

LIFO Reserve

The difference between the cost of inventory calculated using the Last In, First Out (LIFO) method and the cost calculated using the First In, First Out (FIFO) method.

FIFO Assumption

An accounting method where the first items purchased or produced are the first ones used or sold.

LIFO Reserve

The difference in value between inventory calculated using the Last-In, First-Out (LIFO) method and the First-In, First-Out (FIFO) method, used to adjust COGS and inventory valuation.