During periods of rising prices, and being primarily concerned with tax implications, most companies would select:
A) LIFO.
B) FIFO.
C) Specific identification.
D) The inventory valuation does not affect taxation.

Question

Quizplus · Accepted Answer

LIFO (Last In, First Out) is often chosen during periods of rising prices because it results in higher cost of goods sold and lower taxable income, thus reducing tax liability.

During Periods of Rising Prices, and Being Primarily Concerned with Tax