A Business Uses the Same Inventory Method for Both Financial

question 61

Multiple Choice

A business uses the same inventory method for both financial reporting and tax reporting.Because of the UNICAP requirement,ending inventory is likely to be

• A)higher for tax reporting purposes than for financial reporting purposes.
• B)higher for financial reporting purposes than for tax reporting purposes.
• C)the same for both financial and tax reporting as UNICAP requires uniform inventory accounting methods.
• D)None of the above.

---

Definitions:

Automatic Stabilizers

Programs and policies in economics formulated to counter changes in a nation's economic status, without the need for more intervention from governmental bodies or policymakers.

Business Cycle

A recurring sequence of economic expansion and contraction phases experienced by a country's economy.

Public Debt

The total amount of money owed by the government to creditors, which can include domestic or foreign individuals, corporations, or other governments.

National Debt

The total amount of money that a country's government has borrowed, typically as a result of budget deficits.