Question

An inventory method that makes it possible to manipulate net income is the:

a.specific identification method.
b.LIFO method.
c.FIFO method.
d.average cost method.

Answer 1

The LIFO method is an inventory method that allows for manipulation of net income.

Step-by-step explanation:

LIFO stands for Last-In, First-Out, which means that the most recently purchased items are assumed to be sold first. This method can be used to lower net income for tax purposes by matching higher cost items from earlier purchases with current sales.

For example, if a company has high-cost items in its inventory and the prices of those items are increasing, using the LIFO method will result in a higher cost of goods sold, which reduces net income.