The income tax saved by using LIFO instead of FIFO is equal to the ________ times the income tax rate.

Question

Quizplus · Accepted Answer

The income tax saved by using LIFO instead of FIFO is equal to the LIFO Reserve times the income tax rate. The LIFO Reserve is the difference between the inventory value calculated using the FIFO method and the inventory value calculated using the LIFO method. Therefore, option D is the correct answer.

The Income Tax Saved by Using LIFO Instead of FIFO