Identify which inventory costing method (LIFO or FIFO) achieves the effect listed in the following items:
-Prices are rising; cost of goods sold is lower with this method.
A)LIFO
B)FIFO

Question

Quizplus · Accepted Answer

When prices are rising, the FIFO (First In, First Out) method results in a lower cost of goods sold because it assumes that the oldest, and typically cheaper, inventory is sold first.

Identify Which Inventory Costing Method (LIFO or FIFO) Achieves the Effect