Titan Company changed its inventory cost flow assumption from FIFO to LIFO in a period of rising prices.What was the result of the change on ending inventory in the year of the change?
A)increased ending inventory
B)decreased ending inventory
C)no change in ending inventory
D)cannot determine from the information given

Question

Quizplus · Accepted Answer

When changing from FIFO to LIFO during a period of rising prices, the cost of goods sold will increase and the ending inventory will decrease. Therefore, the result of the change on ending inventory in the year of the change is a decrease in ending inventory.

Titan Company Changed Its Inventory Cost Flow Assumption from FIFO