With Respect to LIFO, Which of the Following Is Incorrect

question 13

Multiple Choice

With respect to LIFO, which of the following is incorrect?

• A) If a company uses LIFO for tax purposes it must use it for GAAP purposes.
• B) If the LIFO reserve increases in a given year, the LIFO COGS is higher than it would have been if FIFO had been used for that year.
• C) LIFO results in better matching on the income statement than FIFO.
• D) LIFO results in inventory levels on the balance sheet that are closer to current cost than FIFO.

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Definitions:

M3

A gauge of monetary supply that encompasses M2, including cash, checking deposits, and near money that's easily converted, in addition to large-scale time deposits, institutional money market funds, and other sizeable liquid assets.

Check-Cashing Outlets

Businesses that offer to cash checks for a fee, often serving customers who do not have access to traditional banking services.

Banking Services

Various financial services provided by banks, including loans, deposits, money transfers, and account management.

Money Orders

A financial instrument issued by a bank or postal service that allows the person named on the order to receive a specified amount of cash on demand, often used for payments when checks are not accepted.