Under inflationary conditions, fifo generally results in a lower profit than does lifo, and this difference can be substantial.

Name: Under inflationary conditions, fifo generally results in a lower profit than does lifo, and this difference can be substantial.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Under inflationary conditions, FIFO (First-In, First-Out) generally results in a higher profit than LIFO (Last-In, First-Out) because FIFO uses older, cheaper inventory costs, leading to lower cost of goods sold and higher profits.

Under Inflationary Conditions, Fifo Generally Results in a Lower Profit