Which method might allow a company to make significant inventory purchases at year end for the purpose of manipulating income?
A) FIFO
B) Weighted Average Cost
C) LIFO
D) Specific Identification

Question

Quizplus · Accepted Answer

LIFO (Last In, First Out) can be used to manipulate income by purchasing additional inventory at year end. This increases the cost of goods sold (assuming rising prices), which can lower taxable income.

Which Method Might Allow a Company to Make Significant Inventory