During a period of rising prices and increasing inventory, which cost flow assumption used on both federal income tax returns and financial reports would provide a company with the greatest cash position?

Question

Quizplus · Accepted Answer

LIFO (Last-In, First-Out) results in higher cost of goods sold and lower taxable income during periods of rising prices, thus reducing tax liability and improving cash flow.

During a Period of Rising Prices and Increasing Inventory, Which