Which of the Following Is True Regarding the LIFO Method

question 166

Multiple Choice

Which of the following is true regarding the LIFO method of inventory costing?

• A) A company can use LIFO for tax purposes and FIFO for financial reporting purposes.
• B) Very few U.S. companies use the LIFO method.
• C) If a LIFO liquidation occurs, income tax expense will decrease.
• D) When prices are rising, income taxes are the lowest when the LIFO method is used.

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Definitions:

End Results

The final outcomes or objectives that are aimed for in a business or project management context.

Future Planning

The process of setting goals and developing strategies for achieving them in the future, often involving forecasting and scenario analysis.

Feedforward Controls

Ensure that directions and resources are right before the work begins.

Anticipate Potential Problems

The process of forecasting future challenges or issues that may arise during the course of a project or in the operation of a system, with the aim of mitigating them in advance.