One of the primary benefits of using FIFO when inventory costs are rising is that it results in greater tax savings.When inventory costs are rising,LIFO provides greater tax savings.

Question

Quizplus · Accepted Answer

When inventory costs are rising, LIFO (Last In, First Out) results in greater tax savings compared to FIFO (First In, First Out). This is because LIFO assumes that the last inventory purchased is the first one sold, resulting in a higher cost of goods sold and a lower taxable income. Therefore, the statement in the question is incorrect.

One of the Primary Benefits of Using FIFO When Inventory