(Answered) Purpose this case will discuss the nature and use of a lifo

Accounting

Purpose: This case will discuss the nature and use of a LIFO reserve. Many companies use LIFO for tax and external reporting purposes, but maintain a FIFO, average cost, or standard cost system for internal reporting purposes.

Instructions

(a) State a few reasons why a company may use LIFO for external reporting and FIFO for internal reporting purposes.

(b) Explain what a LIFO reserve is and how it works.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91537608
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