If inventory costs are decreasing over time,the income taxes paid using FIFO will ________ the income taxes paid using LIFO.

Question

Quizplus · Accepted Answer

When inventory costs are decreasing over time, FIFO will result in higher costs of goods sold and therefore lower net income, which will result in lower income taxes paid compared to LIFO. Therefore, the income taxes paid using FIFO will be less than the income taxes paid using LIFO.

If Inventory Costs Are Decreasing Over Time,the Income Taxes Paid