Question

Which method might allow a company to make significant inventory purchases at year end for the purpose of manipulating income?

Answer 1

LIFO

Step-by-step explanation:

LIFO is an abbreviation of “Last-In, First-Out”. It can be regarded as a method that is devices in cost flow assumption purposes which is used to calculate cost of goods sold , it works with assumption that latest product is added to Inventory of a company can be first sold out. It should be noted that LIFO method might allow a company to make significant inventory purchases at year end for the purpose of manipulating income.