When costs to purchase inventory are rising,using LIFO leads to reporting a ________ than FIFO.
A)lower value for inventory on the balance sheet
B)higher value for inventory on the balance sheet
C)lower value for inventory on the income statement
D)higher value for inventory on the income statement

Question

Quizplus · Accepted Answer

When costs are rising,LIFO produces a lower inventory value and a higher cost of goods sold (resulting in a lower gross profit and lower income taxes).

When Costs to Purchase Inventory Are Rising,using LIFO Leads to Reporting