The Appropriate Journal Entry for the Transactions Involving the LIFO

Multiple Choice

The appropriate journal entry for the transactions involving the LIFO reserve and market value adjustments is determined by the particular situation in the firm.If LIFO inventory is greater than FIFO inventory,

A) the loss account for a decline in market value of inventory could be credited rather than debited if the market value had increased from the previous year but was not greater than cost
B) the loss account for a decline in market value of inventory could be debited rather than credited if the market value had decreased from the previous year but was not less than cost
C) the loss account for a decline in market value of inventory could be debited rather than credited if the market value had increased from the previous year but was not greater than cost
D) the loss account for a decline in market value of inventory could be credited rather than debited if the market value had decreased from the previous year but was not greater than cost