33、Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.

Carlton Company uses the LIFO inventory method, but most of the other companies in Carlton's industry use FIFO. Which of the following best describes one of the adjustments that would be made to Carlton's financial statements to compare Carlton with other companies in the industry? An increase in Carlton's LIFO reserve for the year would be:

A. added to ending inventory.

B. added to cost of goods sold.

C. subtracted from ending inventory.

D. subtracted from cost of goods sold.

33、Correct answer is D

"Analysis of Inventories," Gerald I. White, Ashwinpaul C. Sondhi, and Dov Fried

2008 Modular Level I, Vol. 3, pp. 312-314

Study Session 9-35-c

compare and contrast the effect of the different methods on cost of goods sold and inventory balances, and discuss how a company's choice of inventory accounting method affects other financial items such as income cash flow and working capital

An increase in the LIFO reserve would be subtracted from cost of goods sold to equal cost of goods sold on a FIFO basis.