One reason many U.S. companies use the LIFO method of accounting for inventory is that they believe it saves them money on taxes.

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LIFO (Last-In, First-Out) assumes that the most recent inventory items purchased are sold first. This means that the cost of goods sold is based on the most recent and likely higher-priced inventory items, resulting in a lower reported income and lower taxes. This is why many U.S. companies prefer using the LIFO method for inventory accounting.

One Reason Many U