In periods of rising prices, which is an advantage of using the LIFO inventory costing method?
A) Ending inventory will include latest (most recent) costs and thus be more realistic.
B) Cost of goods sold will include latest (most recent) costs and thus will be more realistic.
C) Net income will be the highest and thus reflect the prosperity of the company.
D) Phantom profits are reported.

Question

Quizplus · Accepted Answer

In periods of rising prices, LIFO (Last-In, First-Out) results in the cost of goods sold reflecting the most recent, higher costs, which can provide a more realistic measure of current profitability.

In Periods of Rising Prices, Which Is an Advantage of Using