Which of the following is an advantage for U.S. companies with international operations to use LIFO for U.S. purposes, as opposed to using FIFO for foreign subsidiaries?
A) LIFO creates paper profits.
B) LIFO generally approximates the physical flow of items.
C) Under LIFO, inventory is less vulnerable to price declines.
D) LIFO eliminates balance sheet distortion.

Question

Quizplus · Accepted Answer

Under LIFO, inventory is less vulnerable to price declines, which can be advantageous for U.S. companies with international operations in volatile markets where prices may fluctuate frequently. FIFO may not provide the same protection against price declines.

Which of the Following Is an Advantage for U