If inventory levels are stable or increasing, an argument which is not an advantage of the LIFO method as compared to FIFO is
a. income taxes tend to be reduced in periods of rising prices.
b. cost of goods sold tends to be stated at approximately current cost on the income statement.
c. cost assignments typically parallel the physical flow of goods.
d. income tends to be smoothed as prices change over time.
Answer: c. cost assignments typically parallel the physical flow of goods.
Business
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