Which of the following statements about inventory costing methods is correct?
A)A change in inventory method is allowed only if it improves the accuracy of the company's financial results.
B)During a period of rising prices,LIFO results in a higher income tax expense than does FIFO.
C)International Financial Reporting Standards (IFRS)allow the use of LIFO but not FIFO.
D)In the U.S. ,if a company uses LIFO on the income tax return,it may use a different method for financial reporting.

Question

Quizplus · Accepted Answer

Because switching methods would make it difficult to compare financial results across periods,a change in method is allowed only if it improves the accuracy of the company's financial results.During a period of rising prices,LIFO results in a lower income tax expense than does FIFO.LIFO is not allowed under International Financial Reporting Standards (IFRS).In the United States,the LIFO Conformity Rule requires that if LIFO is used on the income tax return,it also must be used in financial statement reporting.

Which of the Following Statements About Inventory Costing Methods Is