question archive In an inflationary environment: a company's net income will be higher if it uses LIFO than if it uses FIFO
In an inflationary environment: a company's net income will be higher if it uses LIFO than if it uses FIFO
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In an inflationary environment:
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- a company's net income will be higher if it uses LIFO than if it uses FIFO.
- a company's cost of goods sold will be lower if it uses LIFO as opposed to FIFO.
- a company's net income will be the same regardless of whether LIFO or FIFO is used.
- a company's assets will be lower if it uses LIFO as opposed to FIFO cost flow.
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Answer:
D )
Explanation
In an inflationary environment, a company's assets will be lower if it uses LIFO because the inventory will be compiled of items with a lower value because the recently purchased goods of higher value will be sold first.
