alleryStart learning →What is the LIFO reserve?
AProvision for obsolete stock items
BGap between FIFO and LIFO inventory cost
CProfit retained from LIFO sales
DCash set aside for stock purchases
Answer & Solution
Correct answer: B. Gap between FIFO and LIFO inventory cost
It is the gap between inventory measured on FIFO and on LIFO, showing how much taxable income LIFO has deferred.
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