Asked by Refath Ahmed on Apr 27, 2024

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Midyear LIFO liquidations receive the same accounting treatment regardless of whether they are deemed to be temporary or permanent.

LIFO Liquidations

Occurs when a company using the Last-In, First-Out inventory method sells off older inventory items, potentially resulting in a lower cost of goods sold and higher profit.

Accounting Treatment

Refers to the method of applying accounting principles and rules to transactions and financial events in a company’s financial statements.

  • Acquire insight into the ramifications of applying LIFO and FIFO accounting practices on inventory control and financial statements.
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brandy martinMay 01, 2024
Final Answer :
False
Explanation :
Midyear LIFO liquidations may be treated differently depending on whether they are considered temporary or permanent, as the intent behind the liquidation can affect financial reporting and tax implications. Permanent liquidations might lead to a reassessment of inventory layers, while temporary ones might not.