In a period of rising prices, FIFO will have

Question

Quizplus · Accepted Answer

In a period of rising prices, FIFO will have a higher cost of goods sold than LIFO due to using the oldest, lower-priced inventory first. This results in a lower gross profit and higher net income for LIFO, making option A incorrect. Option C is also incorrect as it implies that FIFO will have a higher gross profit than LIFO, which is the opposite of what occurs during rising prices. Option D is irrelevant to the question and can be eliminated. Therefore, the correct answer is B.

In a Period of Rising Prices, FIFO Will Have