Use of the FIFO inventory valuation method enables a company to report higher net income when in a period of falling prices.

Name: Use of the FIFO inventory valuation method enables a company to report higher net income when in a period of falling prices.
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Question

Quizplus · Accepted Answer

In a period of falling prices, FIFO (First-In, First-Out) results in higher cost of goods sold and lower net income, as older, higher-cost inventory is sold first.

Use of the FIFO Inventory Valuation Method Enables a Company