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:

Remoteness Test

Determining whether the damages were too far removed from the original negligent act; a breaching party is only responsible for reasonably expected losses.

Misfeasance

Wrongful conduct.

Nonfeasance

Failure to act; such failure is actionable in tort only where there is a specific duty to act, as with a guardian, parent, or lifeguard.

Legal Causation

The process of determining whether a defendant's actions are legally sufficient to be considered as causing the plaintiff's injuries or damages.