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Accounting Knowledge MCQs

Which of the following is true about comparing LIFO and FIFO methods? (check all that apply)

There is only a one-way conversion from LIFO to FIFO.

Companies must disclose their inventory costs under FIFO when comparing LIFO and FIFO methods.

The FIFO reserve is the difference between the projected ending inventory under LIFO versus FIFO.

To calculate the tax savings under FIFO you multiply the tax rate and the change in the FIFO reserve.

Answer

Correct Answer: Companies must disclose their inventory costs under FIFO when comparing LIFO and FIFO methods.

Explanation:

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