In a period of rising prices, using FIFO would produce a lower cost of goods sold than using LIFO.

Question

Quizplus · Accepted Answer

FIFO (First-In, First-Out) assumes that the oldest inventory items are sold first, so in a period of rising prices, the cost of goods sold is based on the older, lower-cost items, resulting in a lower cost of goods sold compared to LIFO (Last-In, First-Out), which assumes the newest, higher-cost items are sold first.

In a Period of Rising Prices, Using FIFO Would Produce