Financial Reporting and Analysis Q234

0. Analyst 1: Under US GAAP, companies that use the LIFO method must disclose in their financial notes the amount of LIFO reserve.
Analyst 2: LIFO reserve can be used to adjust reported LIFO inventory and cost of goods sold balances to the FIFO method for comparison purposes.

  • Option : C
  • Explanation : Under US GAAP, companies that use the LIFO method must disclose in their financial notes the amount of the LIFO reserve or the amount that would have been reported in inventory if the FIFO method had been used. This information can be used to adjust reported LIFO inventory and cost of goods sold balances to the FIFO method for comparison purposes.
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