Which one of the following statements is not true?
A)Under conditions of rising prices, the LIFO method results in lower income than the FIFO method.
B)In most cases, the FIFO method approximates the physical flow of items in inventory.
C)The LIFO method produces a higher ending inventory value than the FIFO method.
D)The FIFO method includes holding gains in income.

Question

Quizplus · Accepted Answer

This statement is incorrect. The LIFO method generally produces a lower ending inventory value than the FIFO method, as it assumes newer (and therefore more expensive) inventory items are sold first, leaving older (and cheaper) items in inventory.

Which One of the Following Statements Is Not True