When would LIFO liquidation occur?
A) As a result of selling less units than are purchased during the period.
B) As a result of selling the same number of units that are purchased during the period.
C) As a result of selling more units than are purchased during the period.
D) Not enough information.

Question

Quizplus · Accepted Answer

LIFO liquidation occurs when a company sells more units than it purchases during a period, causing older inventory layers (purchased at lower cost) to be liquidated and creating a higher cost of goods sold.

When Would LIFO Liquidation Occur