问题
单项选择题
During a period of rising prices a company may change from LIFO to FIFO to:（）
A. takes advantage of tax deferrals and reduce overall taxes paid.
B. increase COGS and, hence, increase the overall cash flow position of the firm.
C. increase reported inventory and, hence, improve various accounting constructs such as working capital
答案
参考答案：C
解析：
FIFO involves lower cost of goods sold and higher inventory balances. Taxes are higher under FIFO and cash flows are lower (due to higher taxes paid ). Companies are able to manipulate profits under LIFO if they drop inventory below normal levels and dip into "cheap", older inventory. This causes low COGS under LIFO and high profits.