Under the LIFO cost flow assumption during a period of rising costs,which of the following is false?
A)Cost of goods sold will be lower under LIFO than under FIFO.
B)Net income will be lower under LIFO than under FIFO.
C)Income tax expense will be lower under LIFO than under FIFO.
D)Ending inventory will be lower under LIFO than under FIFO.

Question

Quizplus · Accepted Answer

Under the LIFO (Last In, First Out) cost flow assumption during a period of rising costs, the cost of goods sold (COGS) will be higher, not lower, under LIFO than under FIFO (First In, First Out). This is because the most recently acquired (and thus more expensive) inventory items are sold first under LIFO, leading to a higher COGS.

Under the LIFO Cost Flow Assumption During a Period of Rising