Which of the following is incorrect regarding LIFO and FIFO?

Question

Quizplus · Accepted Answer

Option A is true because FIFO assumes that the items sold are the first ones purchased, resulting in lower inventory costs and therefore lower total assets. Option B is true because FIFO assumes that the items sold are the first ones purchased, resulting in lower cost of goods sold (COGS) and, therefore, higher net income. Option D is true because LIFO assumes that the items sold are the last ones purchased, resulting in higher COGS and, therefore, lower net income. However, option C is incorrect because in a period of increasing costs, LIFO will result in lower inventory costs than FIFO, resulting in lower total assets.

Which of the Following Is Incorrect Regarding LIFO and FIFO