Which one of the following is not an advantage of LIFO?

A) In periods of rising prices, less income taxes are paid.
B) In periods of rising prices, less holding gains are reported in net income.
C) Record keeping and financial statement preparation are easier.
D) Conservative income statements and balance sheet disclosures result from rising prices.

LIFO Advantage

A financial benefit that comes from using the Last In, First Out method of inventory valuation, often resulting in lower taxes in periods of inflation.

Rising Prices

A situation in an economy where the general level of prices for goods and services is increasing, often referred to as inflation.

Holding Gains

Holding gains are the increased values of assets that a company holds, realized when the asset is sold or revalued.