Which of the following statements about LIFO is false?
A)It results in a higher cost of goods sold during periods of rising prices.
B)If inventory declines,it will result in a matching of current revenues and old costs
C)The cost of ending inventory will probably be very different from current replacement cost.
D)Firms that use LIFO run the risk of inventory obsolescence because they are keeping old goods on hand.

Question

Quizplus · Accepted Answer

LIFO does not necessarily result in keeping old goods on hand. The choice of goods sold or kept in inventory under LIFO is entirely up to the company's discretion.

Which of the Following Statements About LIFO Is False