Which of the following will occur when inventory costs are decreasing?
A)FIFO will result in a lower net income but a higher ending inventory than will LIFO.
B)FIFO will result in a higher net income but a lower ending inventory than will LIFO.
C)FIFO will result in a lower net income and a lower ending inventory than will LIFO.
D)FIFO will result in a higher net income and a higher ending inventory than will LIFO.

Question

Quizplus · Accepted Answer

When unit costs are falling,FIFO produces a lower ending inventory value and a higher cost of goods sold (resulting in a lower gross profit and a lower net income)when compared to LIFO.

Which of the Following Will Occur When Inventory Costs Are