During periods of increasing costs, an advantage of the LIFO inventory cost method is that it matches more recent costs against current revenues.

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In the LIFO (Last-In-First-Out) inventory cost method, the most recent inventory purchases are assumed to be sold first. Therefore, during periods of increasing costs, LIFO matches more recent and higher costs against current revenues, resulting in a lower net income and tax liability. This is beneficial for companies as it reduces their tax burden during times of inflation.

During Periods of Increasing Costs, an Advantage of the LIFO