During periods of rising costs,LIFO generally results in a higher ending inventory balance.During periods of rising costs,LIFO generally results in a lower ending inventory balance.

Question

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During periods of rising costs, LIFO results in a lower ending inventory balance because the last items purchased (and therefore at the highest cost) are the first ones to be sold, leaving only the older, less expensive items in inventory.

During Periods of Rising Costs,LIFO Generally Results in a Higher