LIFO results in a more accurate valuation of ending inventory on the balance sheet than does FIFO.

Question

Quizplus · Accepted Answer

FIFO results in a more accurate valuation of ending inventory on the balance sheet than LIFO, as it reflects the most recent costs of inventory purchased. LIFO may result in older, lower cost inventory being assigned to ending inventory, causing an understatement of the current value of inventory on the balance sheet.

LIFO Results in a More Accurate Valuation of Ending Inventory