When Inventory Costs Are Falling,which Inventory Costing Method Minimizes the Taxes

question 85

Multiple Choice

When inventory costs are falling,which inventory costing method minimizes the taxes paid?

• A)FIFO
• B)LIFO
• C)average cost
• D)specific identification

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Definitions:

Inventory Volumes

The total amount of goods a company has available for sale or production at any given time, often measured in units or cost value.

Periodic Inventory System

An accounting method that updates inventory balance and cost of goods sold at the end of an accounting period.

Computerized Optical Scanning Equipment

Technology devices used for electronically converting images of text, handwriting, or printed documents into machine-encoded text or images.

Perpetual Systems

Inventory management systems that continuously update the record of inventory levels with each sale or purchase, providing real-time information.