During periods of increasing prices,use of the LIFO inventory method will result in a lower inventory amount on the balance sheet and a lower net income than will use of the FIFO inventory method.

Question

Quizplus · Accepted Answer

LIFO ending inventory consists of the older inventory acquisitions which were at lower prices. LIFO cost of goods sold reports a lower net income because of the higher cost of goods sold.

During Periods of Increasing Prices,use of the LIFO Inventory Method