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.

Question

Quizplus · Accepted Answer

LIFO results in inventory levels on the balance sheet that are based on older costs, not current costs, because the most recent costs are included in COGS.

With Respect to LIFO, Which of the Following Is Incorrect