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

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FIFO (first-in, first-out) assumes that the first goods purchased are the first ones sold, which means the cost of goods sold reflects the current cost of inventory. In contrast, LIFO (last-in, first-out) assumes that the most recent inventory is sold first, so if inventory costs are increasing over time, LIFO will result in a higher cost of goods sold and lower taxable income. Therefore, when inventory costs are increasing, the income taxes paid using FIFO will generally exceed those paid using LIFO.

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