Which inventory valuation model serves as a middle-of-the-road approach for taxes and net profit?

Name: Which inventory valuation model serves as a middle-of-the-road approach for taxes and net profit?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The average cost model takes the average cost of all items in inventory, which serves as a moderate approach for taxes and net profit. It is not as tax-efficient as FIFO, but it is not as inventory value-distorting as LIFO. Therefore, D is the best choice for this question.

Which Inventory Valuation Model Serves as a Middle-Of-The-Road Approach for Taxes