LIFO tends to decrease taxes when
A)costs are declining.
B)costs are constant.
C)costs are increasing.
D)LIFO will always yield the lowest possible taxes.
E)Impossible to determine without specific cost data

Question

Quizplus · Accepted Answer

LIFO (Last In, First Out) tends to decrease taxes when costs are increasing because it matches the most recent (and typically higher) costs against current revenues, resulting in lower reported profits and thus lower taxes.

LIFO Tends to Decrease Taxes When