Which of the following statements is correct?
A)FIFO reports lower net income amounts than LIFO when unit costs are increasing.
B)LIFO reports a higher net income amount than FIFO when unit costs are increasing.
C)LIFO reports a higher net income amount than FIFO when unit costs are decreasing.
D)LIFO reports the same amount of net income as FIFO when unit costs are increasing.

Question

Quizplus · Accepted Answer

When unit costs are decreasing, LIFO results in lower cost of goods sold compared to FIFO, leading to higher net income.

Which of the Following Statements Is Correct