Many taxpayers use the LIFO method of inventory valuation because during inflationary periods, LIFO normally results in the lowest inventory value and hence the lowest taxable income.

Question

Quizplus · Accepted Answer

During inflation, LIFO (Last-In, First-Out) assumes the most recent, higher-cost inventory is sold first, reducing taxable income by increasing the cost of goods sold.

Many Taxpayers Use the LIFO Method of Inventory Valuation Because