During deflationary periods,the use of the LIFO method of costing inventory will result in a greater amount of net income than would result from the use of the FIFO method.

Question

Quizplus · Accepted Answer

During deflationary periods, prices are falling, so the LIFO method will use older, higher-cost inventory first, resulting in lower cost of goods sold and higher net income compared to FIFO, which uses newer, lower-cost inventory.

During Deflationary Periods,the Use of the LIFO Method of Costing