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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