Dollar-value LIFO:
A)Starts with ending inventory measured at current costs and recreates LIFO layers for measuring inventory costs.
B)Increases the recordkeeping costs of LIFO.
C)Only is allowed for internal reporting purposes.
D)None of these is correct.

Question

Quizplus · Accepted Answer

Dollar-value LIFO starts with ending inventory measured at current costs and recreates LIFO layers for measuring inventory costs. This method is used for both internal and external reporting purposes. B is incorrect because dollar-value LIFO actually simplifies recordkeeping by calculating the inventory value in terms of base-year dollars. C is incorrect because dollar-value LIFO is allowed for both internal and external reporting purposes.

Dollar-Value LIFO