The disclosure that shows the difference in the cost of inventory between LIFO and FIFO is referred to as the:

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BlackTom AI · Accepted Answer

The question asks about the disclosure that shows the difference in the cost of inventory between LIFO and FIFO.
Option 1: FIFO adjustment. This term is not the standard name for the disclosure illustrating the difference between LIFO and FIFO costs; it suggests a procedure to convert or adjust to FIFO, but it is not the recognized disclosure name.
Option 2: Inventory allowance. An allowance would typically relate to anticipated losses or lower-of-cost-or-market adjustments, not specifically to the difference between LIFO and FIFO cost layers.
Option 3: LIFO reserve. This is the conventional name for the disclosure that presents the difference between inventory cost under LIFO and what the cost would be under FIFO, effectively showing the cumulative impact of using LIFO instead of FIFO on reported assets and cost of goods sold.
Option 4: Net realizable value. NRV relates to the estimated selling price less costs to complete and sell, not to the differential between inventory costing methods, so it does not describe the LIFO vs FIFO disclosure.
In summary, the term that accurately describes the disclosure of the cost difference between LIFO and FIFO is LIFO reserve, since it captures the adjustment or difference that arises from using LIFO compared with FIFO.

25/SP-ACC-220-1M3, ACC-220-103 Chapter 6 Quiz

The disclosure that shows the difference in the cost of inventory between LIFO and FIFO is referred to as the:

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