Final answer:
Perpetual LIFO may lead to different allocation of costs and inventory. It is an inventory valuation method used in accounting that assumes the most recently acquired inventory is sold first.
Step-by-step explanation:
Perpetual LIFO
may lead to different allocation of
costs
and
inventory
. Perpetual LIFO, or Last-In, First-Out, is an inventory valuation method used in accounting. It assumes that the most recently acquired inventory is sold first, which can result in different cost allocations and inventory values compared to other inventory valuation methods, such as FIFO (First-In, First-Out). For example, if a company purchases inventory at different prices over time, using LIFO may result in higher costs being allocated to current sales, leading to lower reported profits and potentially impacting the company's tax liability.