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Soloha48 [4]
3 years ago
12

It is argued that LIFO should not be allowed to compute net income because a. it does not match costs to revenues, especially wh

en there is inflation in the economy. b. it overstates balance sheet inventory. c. it understates cost of goods sold when prices are rising and therefore makes US companies' results look better than foreign companies' results which can only use FIFO. d. it causes profits to be understated when prices are rising and allows a company to dodge taxes.
Business
1 answer:
Bogdan [553]3 years ago
8 0

Answer:

d. it causes profits to be understated when prices are rising and allows a company to dodge taxes.

Explanation:

The LIFO method should not be permitted to determine the net income as in this case the profits would be understated at the time when price is increased due to this it permits the company to dodge taxes as the inventory consumed in the production process also the high inventory value would be involved in the cost of sales that represent the high cost, this result in lower profits and taxes

Hence, the option d is correct

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Production is the process of making or manufacturing items and merchandise from raw materials or components. In other phrases, manufacturing takes inputs and uses them to create an output that is in shape for intake – a good or product that has a price to a quit-person or purchaser.

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8 0
2 years ago
Cruella Inc. owns 85% of Horace Co. During 20X9, Cruella sells goods to Horace with a 25% gross profit. Horace sold all of these
vovangra [49]

Answer:

Option A is the correct answer,no adjustment is needed.

Explanation:

When related companies sell to each other,the sales transaction is not sales in actual sense,as it is likened to the left hand of an individual exchanging cash with the right hand,in other words, the cash is still owned by the same person.

The same concept is applicable to subsidiaries and parent,the sales recorded from a group perspective is when they sold to external third parties.

When sales happen between related companies, a provision for unrealized profits has to be made to the tune of inventory purchased from related companies  not yet sold externally,as the whole of the goods have been to third parties, no such provision or adjustment is required.

4 0
3 years ago
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If you had the power to decide which substance should be legal and which should not, what criteria would you use in making your
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The use of the substance, long term affects, and the substance affect on those around the person using it.
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3 years ago
The goal of the g21 plan was to bring a vehicle to market that represented a great value and had great environmental benefits. t
svet-max [94.6K]

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3 years ago
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Answer:

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Explanation:

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