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

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When inventory costs are rising and a company uses the Last In, First Out (LIFO) method, large purchases of inventory near the end of the year will be the first to be sold. This increases the cost of goods sold (COGS) on the income statement, which lowers taxable income and thus decreases income taxes paid.

If Inventory Costs Are Rising and a Company Is Using