Which of the following inventory valuation methods minimizes income tax payment during a period of rising inventory costs?

Question

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When inventory costs are rising, the LIFO method can be used to minimize income tax payments since it assumes that the last inventory items purchased were the first ones sold and the cost of goods sold is based on the higher recent purchase prices. This reduces the taxable income, resulting in lower tax payments. However, it may not be the best method for financial reporting purposes as it may not reflect the true cost of inventory or result in a more accurate representation of the financial position of a business.

Which of the Following Inventory Valuation Methods Minimizes Income Tax