In a period of increasing prices, LIFO generally results in a lower tax liability.

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LIFO stands for "Last-In, First-Out" and is a method of inventory accounting where the most recently purchased items are considered to be sold first. In a period of increasing prices, this means that the cost of goods sold (COGS) will be higher under LIFO compared to other inventory accounting methods like FIFO (First-In, First-Out) or average cost. This results in a lower taxable income and ultimately a lower tax liability for the company.

In a Period of Increasing Prices, LIFO Generally Results in a Lower