Question on: JAMB Accounting - 2017

In a period of rising prices: * **Last In, First Out (LIFO)** method will result in the cost of goods sold being based on the most recent (higher) prices. This leads to a higher cost of goods sold, a lower profit, and thus, a lower tax liability. * **First In, First Out (FIFO)** method will result in the cost of goods sold being based on the older (lower) prices. This leads to a lower cost of goods sold, a higher profit, and thus, a higher tax liability. * **Weighted Average** is an averaging method that falls between LIFO and FIFO. It will generally result in a profit figure that is between the profit that would result from using LIFO and FIFO. * **Simple average** is not a proper