When costs are increasing, and inventory levels are stable, a company will report ________.
A) lower cost of goods sold under LIFO than FIFO
B) lower inventory under FIFO than LIFO
C) higher net income under LIFO than FIFO
D) lower net income under LIFO than FIFO

Question

Quizplus · Accepted Answer

Under LIFO (Last-In, First-Out), the most recent, higher-cost inventory is used up first, leading to a higher cost of goods sold and, consequently, lower net income compared to FIFO (First-In, First-Out) when costs are rising.

When Costs Are Increasing, and Inventory Levels Are Stable, a Company