Which Inventory Costing Method Results in the Lowest Income Tax

question 144

Multiple Choice

Which inventory costing method results in the lowest income tax expense during a period of decreasing prices?

• A)FIFO
• B)LIFO
• C)Specific Identification
• D)Weighted Average Cost

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Definitions:

Domestic Output

The overall value of goods and services produced domestically in a country within a set period.

Gini Ratio

A benchmark for evaluating the deviation of income distribution in a group, where a value of 0 means entirely equal distribution and 1 illustrates the highest level of inequality.

Measured

Measured refers to the process of quantifying or evaluating something through systematic observation or calculation.

Income Inequality

The unequal distribution of annual or lifetime income among individuals or households in an economy.