If costs are declining, using LIFO will result in lower cost of goods sold and a higher net income as compared to FIFO and moving-average methods.

Question

Quizplus · Accepted Answer

When costs are declining, LIFO results in lower cost of goods sold because the most recent purchases, which are at the lower cost, are expensed first. This results in a higher net income compared to FIFO and moving-average methods, which expense the older, higher-cost purchases first.

If Costs Are Declining, Using LIFO Will Result in Lower