Which of the following statements is not a characteristic of the LIFO method of pricing inventory?
A)During a period of rising prices,LIFO tends to minimize the amounts of income taxes owed.
B)The cost of goods sold is measured in relatively current costs.
C)Inventory is valued at relatively current costs.
D)During a period of falling prices,LIFO tends to maximize the amounts of income taxes owed.

Question

Quizplus · Accepted Answer

LIFO (Last-In, First-Out) method assumes that the last items placed in inventory are sold first. Therefore, during a period of rising prices, the cost of goods sold reflects the most recent, higher costs, while the inventory is valued at older, lower costs. This means inventory is not valued at relatively current costs, making statement C incorrect.

Which of the Following Statements Is Not a Characteristic of the LIFO