Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration

Question 18QS_3

Expert-verified
Financial & Managerial Accounting
Found in: Page 261
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

Identify the inventory costing method best described by each of the following separate statements. Assume a period of increasing costs.

_____3. Provides a tax advantage (deferral) to a corporation when costs are rising.

LIFO Method.

See the step by step solution

Step by Step Solution

Definition of Tax

Any fee charged by the central government or any authority on the benefits generated by the individual and business is known as tax.

Fill in Blanks

LIFO Provides a tax advantage (deferral) to a corporation when costs rise.

Explanation: Under the LIFO method, the cost of goods sold was reported higher than in the FIFO method. Due to the higher cost of goods sold, reported income is lower, and consequently, the tax liability will be lower. Therefore, it will provide a tax advantage.

Icon

Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.