Inventory may be valued on the tax return at the lower of cost or market unless
A) replacement cost is higher than historical cost.
B) the taxpayer determines inventory cost using the LIFO method.
C) the taxpayer determines inventory cost using the FIFO method.
D) the cash method of accounting is used by the taxpayer.
B) the taxpayer determines inventory cost using the LIFO method.
Taxpayers who use the LIFO inventory valuation method may not use the lower of cost or market method.
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In a traditional volume-based cost system, total manufacturing costs are calculated by:
A. adding activity cost, direct material cost, and direct labor cost. B. subtracting manufacturing overhead from selling price. C. adding manufacturing overhead cost, direct materials cost, and direct labor cost. D. adding direct material cost and direct labor cost.
Which of the following is an example of a deferral?
a. Interest expense incurred but not yet paid b. A commission collected in advance c. Estimated income taxes for the year d. Medical fees earned but not yet collected
Which of the following costs normally is expensed in the year incurred, regardless of the extent of future benefit?
a. Technology b. Customer lists c. Research and development d. Leasehold improvements
________________ is a common attitude toward the illegal download of music.
a. It benefits artists b. It is on the Internet, so I can copy it for free c. It is my right d. Intellectual property rights are not relevant