Exam CFA-Level-I Topic 1 Question 1719 Discussion

Actual exam question for CFA's CFA-Level-I exam
Question #: 1719
Topic #: 1
In a period of rising prices, many firms adopt the periodic LIFO method of accounting for inventory cost for tax purposes. When compared with periodic FIFO or average cost:

Suggested Answer: B Vote an answer

The latest costs, which are the highest costs, will be allocated to cost of goods sold. The higher cost of goods sold will cause income before taxes to be lower, and thus income taxes will be lower.

by Roxanne at May 24, 2025, 09:05 AM

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