What is the result Of using LIFO in inventory in time of increase prices in market continuously

option D..............................................

D-...>>>>>>>>>> decrease amount of tax for period

Using LIFO 

  >Reduces the value of inventory   in the   end of the period > reduces the profit and thus >>> reduces  amount of tax

D, Decreases the tax for the current period..............

D- decrease amount of tax for period

D- decrease amount of tax for period

Last-In, First-Out (LIFO)

If a company uses LIFO valuation when it files taxes, which results in lower taxes when prices are increasing, it then must also use LIFO when it reports financial results to shareholders. This lowers net income and, ultimately, earnings per share.

( D ) is the correct answer.

when using LIFO and prices are rising, and if there is no LIFO reserve liquidation, income is lower due to higher COS, hence lower tax. Answer is D.

If there is LIFO reserve liquidation and prices are rising, the effect would be reversed.

D- Decrease amount of tax for period.................................

D- decrease amount of tax for period, by increasing the COS , profit will be less.

D, Because Last items purchased will be of higher cost (as prices are increasing), so cost of sales will be pushed up and will result in low gross profit and so low net profit and therefore there will be decrease in amount of tax for period.

D,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,