Which of the Following Inventory Valuation Methods Minimizes Income Tax

question 12

Multiple Choice

Which of the following inventory valuation methods minimizes income tax expense during a period of rising inventory costs?

• A) first-in, first-out
• B) last-in, first-out
• C) weighted-average
• D) specific identification

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Definitions:

Consumer Sovereignty

The idea that what consumers want influences the goods and services produced in an economy.

Conform To Consumer Demands

Adjusting product offerings, services, or business practices to meet the expectations and preferences of consumers.

Economically Efficient

A state where resources are allocated in a way that maximizes the net benefit to society, with no waste.

Total Costs

Represents the complete expenditures incurred by a firm or an individual in the production or purchase of goods and services.