Which of the following statements is true?
A)FIFO results in a lower net income than LIFO when costs are increasing.
B)LIFO results in a higher net income than FIFO when costs are increasing.
C)LIFO results in a higher net income than FIFO when costs are decreasing.
D)LIFO results in the same net income as FIFO when costs are increasing.

Question

Quizplus · Accepted Answer

When costs are decreasing, LIFO results in a higher net income than FIFO because the older, higher-cost inventory is used up first, leaving the newer, lower-cost inventory on the balance sheet.

Which of the Following Statements Is True