Which of the Following Is a Correct Statement About LIFO

question 2

Multiple Choice

Which of the following is a correct statement about LIFO and the LIFO reserve?

• A) The LIFO reserve can increase when inventory costs are decreasing.
• B) The LIFO reserve makes it difficult to compare ratios with companies who use FIFO to value their inventory.
• C) The LIFO reserve is reported on a company's income statement.
• D) The LIFO reserve can be used to determine how much income tax the company has saved since it started using LIFO.

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