The use of LIFO in accounting for a firm's inventory: A. usually matched the physical flow of goods through the business. B. is usually used for internal management purposes. C. usually provides a better match of expenses with revenue. D. none of the above is correct.

Question

Computers & Technology

Rocco Summers

16 June, 18:24

The use of LIFO in accounting for a firm's inventory: A. usually matched the physical flow of goods through the business. B. is usually used for internal management purposes. C. usually provides a better match of expenses with revenue. D. none of the above is correct.

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Victoria Bullock · Answer 1

Answer: (C) Usually provides a better match of expenses with revenue

Explanation:

The LIFO stand for the last in and first out and it is the cost flow that basically provide the good match of the expenses along with the revenue.

LIFO basically matched the current lost with the current revenue so that is why it is assumption that the LIFO measure better the income. It basically used to place various accounting value in the inventory.

LIFO do not reflect any kind of flow which is physical inventory and it works same as the stack method. The LIFO technique works under the presumption that the last thing of stock bought is the first sold.