During the current year,cost of goods sold was higher under the LIFO method than under the FIFO method.Which of the following statements about price changes is true?
A)Prices were unchanged.
B)Prices were decreasing.
C)Prices were increasing.
D)Unable to determine from the information given

Question

Quizplus · Accepted Answer

Under LIFO method, the cost of goods sold reflects the most recently purchased or produced items, which are generally more expensive due to inflation. Therefore, if cost of goods sold is higher under LIFO than under FIFO, it indicates that prices were increasing during the year.

During the Current Year,cost of Goods Sold Was Higher Under