Quiz 8.96 – LIFO Liquidation
Intermediate Accounting
Spiceland, Nelson, and Thomas
10th Edition
LIFO liquidation causes income taxes to increase when:
LIFO liquidation causes income taxes to increase when:
To use the retail inventory method, net sales cover sales returns but exclude sales discounts and employee discounts. True or false?
The retail amount used to calculate the cost-to-retail percentage is reduced by normal shortages. True or false?
The cost and retail amounts that calculate the cost-to-retail percentage are reduced by abnormal shortages. True or false?
What are the differences of U.S. GAAP and IFRS in the application of the lower of cost or net realizable value rule for valuing inventory?
How do material adjustments to inventory due to the application of the lower of cost or market (LCM) rule be reported in the financial statements?
Outline the steps in the gross profit method of estimating ending inventory and indicate when it is used.
Differentiate the gross profit method and retail method in estimating ending inventory.
Explain the financial reporting needed if a company changes to or from the LIFO inventory method.
Explain the financial reporting needed if material misstatements are in previous financial statements included for comparative purposes in the current year’s financial statements.