If the LIFO reserve increases during the year, and inventory costs are increasing, ________.
A) cost of goods sold will be higher under FIFO than LIFO
B) cost of goods sold will be higher under LIFO than FIFO
C) the journal entry will debit LIFO Reserve
D) the journal entry will credit Cost of Goods Sold

Question

Quizplus · Accepted Answer

When inventory costs are increasing, LIFO results in higher cost of goods sold compared to FIFO because the most recent, higher-cost inventory is used up first.

If the LIFO Reserve Increases During the Year, and Inventory