When prices are rising,which method of inventory,if any,will result in the lowest relative net cash outflow (including the effects of taxes,if any)?
A)LIFO.
B)FIFO.
C)Weighted average
D)None of these;inventory methods cannot affect cash flows.

Question

Quizplus · Accepted Answer

LIFO (Last In, First Out) results in higher cost of goods sold during periods of rising prices, which reduces taxable income and thus taxes paid, leading to lower net cash outflows.

When Prices Are Rising,which Method of Inventory,if Any,will Result in the Lowest