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When a firm uses the Last In, First Out (LIFO) inventory cost flow assumption, it assumes that the most recently acquired inventory items are sold first. This can result in lower taxable income during periods of rising prices, as the higher costs of newer inventory are matched against current revenues. Consequently, this can lead to reduced tax liabilities but may also result in lower reported earnings. Additionally, LIFO can create discrepancies between the book value of inventory and current market values, potentially affecting financial ratios and investor perceptions.
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What method of inventory cost flows is the cost flow assumed in reverse order?
THERE ARE THREE METHODS OF INVENTORY COSTS FLOW. 1: LIFO=first in first out 2; LIFO= last in first out 3: AVERAGE method and your answer is LIFO
What inventory cost method is often adopted because of income taxes?
lifo
Which inventory method assigns the most recent costs to the cost of the good sold?
LIFO
Under the LIFO inventory costing method are the most recent costs are assigned to ending inventory?
No, under the LIFO (Last In, First Out) inventory costing method, the most recent costs are assigned to the cost of goods sold, not to ending inventory. This means that the older costs remain in the ending inventory. Consequently, in periods of rising prices, LIFO typically results in lower ending inventory values and higher cost of goods sold compared to FIFO (First In, First Out).
Under which method of inventory cost flows is the cost flow assumed to be in reverse order in which expenditures were made?
LIFO
What is lower inventory cost?
Are you asking for the method of the lower inventory cost? If so it would be the Lifo method using the assumption that in the rising price economy you paid more for the goods that were brought in last.
Does Target use the lifo fifo or average-cost inventory method?
fifo
What method of inventory cost flows is the cost flow assumed in reverse order?
THERE ARE THREE METHODS OF INVENTORY COSTS FLOW. 1: LIFO=first in first out 2; LIFO= last in first out 3: AVERAGE method and your answer is LIFO
When the cost of inventory is rising which inventory cost flow method will produce the lowest amount of cost of goods sold?
LIFO
What inventory cost method is often adopted because of income taxes?
lifo
What inventory valuation model minimize income tax when cost are rising?
lifo
Which inventory method assigns the most recent costs to the cost of the good sold?
LIFO
What is the inventory method that charges the most recent cost incurred against revenue?
LIFO
With inflation what are the implications of using LIFO and FIFO inventory methods and how do they affect the cost of goods sold?
LIFO inventory valuation assumes the latest purchased inventory becomes part of the cost of goods sold, while the FIFO method assigns inventory items that were purchased first to the cost of goods sold. In an inflationary environment, the LIFO method will result in a higher cost of goods sold figure and one that more accurately matches the sales dollars recorded at current dollars.
Under the LIFO inventory costing method are the most recent costs are assigned to ending inventory?
No, under the LIFO (Last In, First Out) inventory costing method, the most recent costs are assigned to the cost of goods sold, not to ending inventory. This means that the older costs remain in the ending inventory. Consequently, in periods of rising prices, LIFO typically results in lower ending inventory values and higher cost of goods sold compared to FIFO (First In, First Out).
Under which method of inventory cost flows is the cost flow assumed to be in reverse order in which expenditures were made?
LIFO
What inventory cost methods results in lowest net income during a period of rising inventory costs?
Last-in, first-out (LIFO)
