Which one of the following is not an advantage of LIFO?
A) In periods of rising prices, less income tax is paid.
B) In periods of rising prices, less holding gains are reported in net income.
C) Record keeping and financial statement preparation are easier.
D) Conservative income statements and balance sheet disclosures result from rising prices.

Question

Quizplus · Accepted Answer

LIFO (Last In, First Out) does not inherently make record keeping and financial statement preparation easier. In fact, it can complicate these processes due to the need to track inventory layers and their associated costs, especially in periods of fluctuating prices. The other options (A, B, D) are considered advantages of using LIFO, particularly in contexts of rising prices.

Which One of the Following Is Not an Advantage of LIFO