CFA Practice Question

There are 520 practice questions for this study session.

CFA Practice Question

The LIFO reserve may increase due to ______.

I. inventory price increases
II. more inventory units purchased than units sold
A. I only
B. II only
C. Both I and II
Explanation: The increased LIFO reserve should be used to adjust reported LIFO inventory and COGS.

User Contributed Comments 3

User Comment
mhtwo holding prices constant, II is not true. What else are we supposed to assume if this is not specified?
CFASac It says 'may' increase. So if prices increase then II 'may' increase.
DariSH We should suppose that prices are growing if not stated otherwise...
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