What Is the LIFO Method? What Are Its Advantages and Disadvantages

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The Answer is The LIFO method places an inventory value on items based on Last In, First Out. Assuming proper rotation, it is the opposite as the actual cost method. However, during periods of significant inflation, it will result in deflating profits by indicating a lower inventory valuation. This results in payment of lower taxes and in some cases bonuses-an advantage or disadvantage based on your perspective. If addition capital is being sought from outside investors, for instance, higher "profits" would probably be advantageous.

What Is the LIFO Method? What Are Its Advantages and Disadvantages

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What Is the LIFO Method? What Are Its Advantages and Disadvantages

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