Which accounting method gives retailers a tax advantage during inflationary times?

Question

Quizplus · Accepted Answer

LIFO (last in, first out) accounting method assumes that the last items purchased are sold first. During inflationary times, inventory costs tend to rise, and using LIFO decreases the reported net income by taking into account the higher-priced inventory as sold first, which results in lower taxable income and a tax advantage for retailers.

Which Accounting Method Gives Retailers a Tax Advantage During Inflationary