Which of the following statements is correct when inventory prices are decreasing?
A)LIFO will result in lower net income and a higher inventory valuation than will FIFO.
B)LIFO will result in higher net income and a higher inventory valuation than will FIFO.
C)FIFO will result in higher net income and a higher inventory valuation than will LIFO.
D)FIFO will result in higher net income and a lower inventory valuation than will LIFO.

Question

Quizplus · Accepted Answer

LIFO reports a lower cost of goods sold and a higher net income when prices are decreasing.

Which of the Following Statements Is Correct When Inventory Prices