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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