TB MC Qu. 8-98 (Static) A company has the following information... A company has the following information related to its ending inventory: LIFO $300,000 350,000 12/31/2023 12/31/2024 FIFO $ 400,000 480,000 The company makes an adjusting entry with a debit to Cost of Goods Sold and a credit to LIFO Reserve for $130,000 at the end of 2024 ($480,000 - $350,000). Which of the following statements is correct? Multiple Choice The company should instead debit the LIFO Reserve. The adjusting entry should tead be made for $30,000. Cost of goods sold is higher under LIFO than under FIFO by $130,000 in 2024.
TB MC Qu. 8-98 (Static) A company has the following information... A company has the following information related to its ending inventory: LIFO $300,000 350,000 12/31/2023 12/31/2024 FIFO $ 400,000 480,000 The company makes an adjusting entry with a debit to Cost of Goods Sold and a credit to LIFO Reserve for $130,000 at the end of 2024 ($480,000 - $350,000). Which of the following statements is correct? Multiple Choice The company should instead debit the LIFO Reserve. The adjusting entry should tead be made for $30,000. Cost of goods sold is higher under LIFO than under FIFO by $130,000 in 2024.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Adjusting entries are a collection of journal entries that are recorded at the end of the accounting period to guarantee that all accounts possess current and accurate balances. Adjustments are simply the application of the accrual accounting method.
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