Which of the following is not an advantage of LIFO over FIFO?
A)lower income taxes
B)better inventory figure on balance sheet
C)better matching of revenues and costs on the income statement
D)cost of goods sold better approximates current replacement cost

Question

Quizplus · Accepted Answer

Better inventory figure on the balance sheet is not an advantage of LIFO over FIFO. In fact, FIFO provides a more accurate inventory figure on the balance sheet as it reflects current market prices. LIFO can lead to understating the value of inventory on the balance sheet in periods of inflation. The other options (A, C, and D) are advantages of LIFO over FIFO.

Which of the Following Is Not an Advantage of LIFO