Question on: JAMB Accounting - 2024
A method that is beneficial for tax purposes in inflationary times is?
A
LIFO
B
SAP
C
FIFO
D
WAP
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Correct Option: A
In inflationary times, the LIFO (Last-In, First-Out) method is most beneficial for tax purposes.
Because LIFO assigns the most recently purchased (and higher-priced) items to cost of goods sold, profits appear lower—reducing taxable income. FIFO and WAP generally result in higher profits and therefore higher tax liabilities during inflation.
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