During a period of rising prices,LIFO results in a lower income tax expense than does FIFO.
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In a period of rising prices, LIFO (last in, first out) method assumes that the most recent inventory items are sold first, resulting in higher cost of goods sold and therefore lower taxable income. On the other hand, FIFO (first in, first out) method assumes that the oldest inventory items are sold first, resulting in lower cost of goods sold and higher taxable income. Therefore, LIFO results in a lower income tax expense than does FIFO in a period of rising prices.

During a Period of Rising Prices,LIFO Results in a Lower