Of the three cost-flow assumptions, when inventory costs have been falling and inventory amounts increasing, LIFO results in balance sheet figures that are _____, cost of goods sold will _____, and _____ reported net income
A)closest to current cost, be out of date, highest
B)out of date, closest to current cost, highest
C)closest to current cost, be out of date, lowest
D)out of date, closest to current cost, lowest
E)closest to current cost, closest to current cost, highest

Question

Quizplus · Accepted Answer

Under LIFO, the balance sheet figures are out of date because older costs remain in inventory. The cost of goods sold reflects the most recent costs, which are closest to current costs. Falling costs result in the highest reported net income.

Of the Three Cost-Flow Assumptions, When Inventory Costs Have Been