In Order to Pay the Least Income Tax Possible in Periods

question 37

Multiple Choice

In order to pay the least income tax possible in periods of constant costs, the company should use which of the following inventory costing methods?

• A)FIFO
• B)LIFO
• C)Average cost
• D)Any method, as there is no effect on net income or taxes for the period if costs are constant.

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Definitions:

Inventory

Inventory refers to the goods and materials that a business holds for the ultimate goal of resale or production.

Wind-Powered Electricity

The generation of electrical power by converting the energy obtained from wind turbines into electricity.