Question
Jekyl sells yogurt. The yogurt is sold in containers that cannot be distinguished from each other. Prices are increasing and Jekyl intends to increase its
Jekyl sells yogurt. The yogurt is sold in containers that cannot be distinguished from each other. Prices are increasing and Jekyl intends to increase its inventory levels over time.
Which of the following statements is true? (Only one is correct. Read them carefully.)
| a. | Jekyl must use FIFO for financial reporting purposes if it wants to reduce the volume (physical mass) of yogurt that spoils. | |
| b. | Jekyl can use any of the 4 costing methods (FIFO, LIFO, Weighted-average, Specific Identification). | |
| c. | If Jekyl uses FIFO it will maximize its cash flow. | |
| d. | If Jekyl chooses LIFO for financial reporting purposes, it will be required to use LIFO for tax purposes. | |
| e. | If Jekyl uses LIFO it will minimize its reported net income. |
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