A marketer operating in a country experiencing high inflation should use the LIFO (last in-first out) accounting method instead of the FIFO (first in-first out) method

Question

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In a country experiencing high inflation, the cost of inventory increases over time. Using LIFO, the most recent inventory purchases are assumed to be sold first, therefore the cost of goods sold (COGS) reflects the higher recent prices, resulting in lower taxable income. This can be advantageous for a company in a high inflation environment. On the other hand, FIFO assumes that the oldest inventory is sold first, resulting in a lower COGS and therefore higher taxable income.

A Marketer Operating in a Country Experiencing High Inflation Should