During a period of lowering prices,the FIFO accounting method will produce a higher balance sheet inventory but a lower cost of goods sold than the LIFO accounting method.

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During a period of lowering prices, the LIFO accounting method will produce a higher cost of goods sold as the most recent, higher-priced inventory will be sold first. This results in a lower balance sheet inventory. In contrast, the FIFO accounting method assumes that the oldest, lower-priced inventory is sold first, resulting in a higher balance sheet inventory but a lower cost of goods sold.

During a Period of Lowering Prices,the FIFO Accounting Method Will