Which inventory costing method might allow a company to manipulate income by making significant inventory purchases at year end?

Question

Quizplus · Accepted Answer

LIFO (last-in, first-out) is a inventory costing method that assumes the last units purchased are the first ones sold. Therefore, if a company makes significant inventory purchases at year end using LIFO, it will decrease the cost of goods sold and increase the value of ending inventory, which will increase net income. This allows the company to manipulate income by simply timing their inventory purchases.

Which Inventory Costing Method Might Allow a Company to Manipulate