In an inflationary environment,
A)a company's net income will be higher if it uses FIFO than if it uses LIFO.
B)a company's cost of goods sold will be lower if it uses LIFO as opposed to FIFO.
C)a company's net income will be the same regardless of whether LIFO or FIFO is used.
D)a company's assets will be lower if it uses FIFO as opposed to LIFO cost flow.

Question

Quizplus · Accepted Answer

In an inflationary environment, prices are rising. FIFO will produce the lowest cost of goods sold (earliest purchases) compared with LIFO, and a higher net income.

In an Inflationary Environment