In times of rising prices for inventory,which of the following is true?
A) LIFO adopters would report higher cost of goods sold and lower ending inventory than FIFO adopters.
B) FIFO adopters would report higher profits and lower ending inventory than LIFO adopters.
C) LIFO adopters would report higher profits and higher ending inventory than FIFO adopters.
D) FIFO adopters would report higher cost of goods sold and higher ending inventory than LIFO adopters.
E) None of the given answers.

Question

In times of rising prices for inventory,which of the following is true? 
A) LIFO adopters would report higher cost of goods sold and lower ending inventory than FIFO adopters.
B) FIFO adopters would report higher profits and lower ending inventory than LIFO adopters.
C) LIFO adopters would report higher profits and higher ending inventory than FIFO adopters.
D) FIFO adopters would report higher cost of goods sold and higher ending inventory than LIFO adopters.
E) None of the given answers.

Quizplus · Accepted Answer

In times of rising prices for inventory, LIFO (Last In, First Out) adopters would report higher cost of goods sold and lower ending inventory than FIFO (First In, First Out) adopters because LIFO assumes that the most recently purchased items are the first ones sold, which means higher-priced inventory is used in cost of goods sold, resulting in a lower net income. Therefore, the best choice is (A).

In Times of Rising Prices for Inventory,which of the Following