If FIFO is used for inventory valuation instead of LIFO when prices are falling:
A)Cost of goods sold will be less under FIFO than LIFO.
B)Cost of goods sold will be more under FIFO than LIFO.
C)Inventory value will be less under FIFO than LIFO.
D)There is no difference in inventory or cost of goods sold.

Question

Quizplus · Accepted Answer

When prices are falling, the older, higher-cost inventory is sold first under FIFO, resulting in a higher cost of goods sold compared to LIFO, where the newer, lower-cost inventory is sold first.

If FIFO Is Used for Inventory Valuation Instead of LIFO