Companies can avoid paying income taxes on inventory profits by using the ____ inventory valuation method.

Question

Quizplus · Accepted Answer

The Last-in-First-out (LIFO) inventory valuation method assumes that the last items purchased are the first to be sold, which can lead to higher cost of goods sold and lower taxable income. This method is allowed under tax laws in many countries, including the United States. Therefore, companies can avoid paying income taxes on inventory profits by using the LIFO inventory valuation method.

Companies Can Avoid Paying Income Taxes on Inventory Profits by Using