During a period of inflation,the LIFO method reports a larger cost of goods sold amount than FIFO.

Question

Quizplus · Accepted Answer

LIFO (last-in, first-out) assumes that the most recently purchased inventory items are the first to be sold, which means that during periods of inflation the cost of those items will be higher. This results in a higher cost of goods sold amount compared to FIFO (first-in, first-out), which assumes that the oldest inventory items are sold first, resulting in a lower cost of goods sold during inflation.

During a Period of Inflation,the LIFO Method Reports a Larger