When a company uses LIFO for external reporting purposes and FIFO for internal

When a company uses lifo for external reporting

  • Test Prep
  • appledogz
  • 51
  • 95% (21) 20 out of 21 people found this document helpful

This preview shows page 16 - 18 out of 51 pages.

76. When a company uses LIFO for external reporting purposes and FIFO for internal reporting purposes, an Allowance to Reduce Inventory to LIFO account is used. This account should be reported a. on the income statement in the Other Revenues and Gains section. b. on the income statement in the Cost of Goods Sold section. c. on the income statement in the Other Expenses and Losses section. d. on the balance sheet in the Current Assets section. 77. What happens when inventory in base year dollars decreases?
Background image
Valuation of Inventories: A Cost-Basis Approach 8 - 17 78. How might a company obtain a price index in order to apply dollar-value LIFO? 79. In the context of dollar-value LIFO, what is a LIFO layer? S80. Which of the following statements is not true as it relates to the dollar-value LIFO inven-tory method? a. It is easier to erode LIFO layers using dollar-value LIFO techniques than it is with specific goods pooled LIFO. b. Under the dollar-value LIFO method, it is possible to have the entire inventory in only one pool. c. Several pools are commonly employed in using the dollar-value LIFO inventory method. d. Under dollar-value LIFO, increases and decreases in a pool are determined and measured in terms of total dollar value, not physical quantity. S81. Which of the following is not considered an advantage of LIFO when prices are rising? 82. Which of the following is true regarding the use of LIFO for inventory valuation?
Background image
Image of page 18

You've reached the end of your free preview.

Want to read all 51 pages?

  • Spring '10
  • Brown
  • Thirteenth Edition

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes