If prices are rising and a company is using LIFO, large purchases of inventory near the end of the year will:

Name: If prices are rising and a company is using LIFO, large purchases of inventory near the end of the year will:
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Question

Quizplus · Accepted Answer

Under LIFO (Last-In, First-Out), the most recent inventory costs are used to calculate the cost of goods sold. If prices are rising, these costs will be higher, leading to a lower taxable income and thus decreasing income taxes paid.

If Prices Are Rising and a Company Is Using LIFO