Which one of the following is not a disadvantage of the LIFO inventory cost flow assumption?
A)the impact of LIFO liquidation profits
B)failure to match the most recent costs with revenue
C)the possibility of income manipulation by management
D)impaired comparability between companies using LIFO

Question

Quizplus · Accepted Answer

Matching the most recent costs with revenue is not a disadvantage of LIFO. In fact, LIFO matches the oldest costs with revenue, which can be beneficial during periods of inflation when older, lower cost inventory items are sold at higher prices. The other options listed are all potential disadvantages of using LIFO.

Which One of the Following Is Not a Disadvantage of the LIFO