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Which inventory method FIFO or LIFO would be preferred for income tax purposes in periods of rising prices?
Wiki User
∙ 13y ago
In a period of rising prices, your most recently purchased inventory would have the highest value. Therefore, using LIFO would result in a higher Cost of Goods Sold, a lower Net Income and a lower income tax liability.
Wiki User
∙ 13y ago
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Merchandise Inventory is found on the income statement. True or false?
It is true that merchandise Inventory is found on the income statement.
Advantages and disadvantages the retail inventory method?
It is cost effective and simple for companies to implement since it reduces the number of physical inventory counts. It is also accepted as a method of determining cost of goods sold for income tax purposes by the IRS.
What happens to net income if inventory is understated?
If inventory is understated, net income is also understated because cost of goods sold will be overstated
When the perpetual inventory system is used the inventory sold is shown on the income statement as?
cost of merchandise sold.
If a company uses the periodic inventory system what is the impact on net income of including goods in transit fob shipping point in purchases but not ending inventory?
Understate net income
Why do income statements for internal purposes differ to published income statements?
The difference in operating income between the two methods is the difference in ending inventory values, which is the fixed overhead costs that have been capitalized as an asset ( inventory ) because overhead costs that have been capitalized as an asset.
Merchandise Inventory is found on the income statement. True or false?
It is true that merchandise Inventory is found on the income statement.
Advantages and disadvantages the retail inventory method?
It is cost effective and simple for companies to implement since it reduces the number of physical inventory counts. It is also accepted as a method of determining cost of goods sold for income tax purposes by the IRS.
What happens to net income if inventory is understated?
If inventory is understated, net income is also understated because cost of goods sold will be overstated
What part of the elements of financial statements does inventory bleong to?
Inventory is part of Balance sheet as well as income statement. Inventory is shown as an asset in balance sheet and as an expense when used in income statement.
What is the symbol for Nuveen Preferred Income Opportunites Fund in the NYSE?
The symbol for Nuveen Preferred Income Opportunites Fund in the NYSE is: JPC.
What is the symbol for Nuveen Quality Preferred Income Fund in the NYSE?
The symbol for Nuveen Quality Preferred Income Fund in the NYSE is: JTP.
What is the symbol for John Hancock Preferred Income Fund in the NYSE?
The symbol for John Hancock Preferred Income Fund in the NYSE is: HPI.
What is the symbol for Nuveen Preferred and Income Term Fund in the NYSE?
The symbol for Nuveen Preferred and Income Term Fund in the NYSE is: JPI.
Number of times preferred dividends earned?
net income/preferred dividends
How agriculture income is treated for income tax purposes?
direct income
Do you have to report your inventory as income each year?
Your inventory is an ASSET (has value in and of itself) but it does not become income unless/until it is sold for more than you paid for it.
