In an inflationary environment,
A)a company's net income will be higher if it uses LIFO than if it uses FIFO.
B)a company's cost of goods sold will be lower if it uses LIFO as opposed to FIFO.
C)a company's net income will be the same regardless of whether LIFO or FIFO is used.
D)a company's assets will be lower if it uses LIFO as opposed to FIFO cost flow.

Question

Quizplus · Accepted Answer

In an inflationary environment, LIFO results in higher cost of goods sold and lower ending inventory values compared to FIFO, leading to lower reported assets.

In an Inflationary Environment