__________ is a true statement.
A) During periods of inflation, LIFO makes the balance sheet less representative of the actual inventory values than if FIFO were used
B) During periods of inflation, FIFO makes the balance sheet less representative of actual inventory values than if LIFO were used
C) After inflation ends, distortion due to LIFO will disappear as inventory is sold
D) During periods of inflation, LIFO overstates earnings relative to FIFO

Question

Quizplus · Accepted Answer

During periods of inflation, LIFO (Last-In, First-Out) results in older, lower-cost inventory remaining on the balance sheet, making it less representative of current market values compared to FIFO (First-In, First-Out), which reflects more recent, higher costs.

__________ Is a True Statement