Accountants Should Be Aware That LIFO Liquidations Can Potentially Result

Multiple Choice

Accountants should be aware that LIFO liquidations can potentially result in which of the following?

A) If older less costly layers are liquidated, a correspondingly lower cost of goods sold will result.
B) If older less costly layers are liquidated, the company may be faced with higher taxes for those deferred in previous periods.
C) If older less costly layers are liquidated, a correspondingly higher gross profit will result.
D) All of these could result.