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When inventory prices are increasing, the FIFO costing method will generally yield a cost of goods sold that i?


When inventory prices are increasing, the FIFO costing method will generally yield a cost of goods sold that is



a. less than the cost of goods sold under LIFO.

b. equal to the gross margin under LIFO.

c. equal to the cost of goods sold under LIFO.

d. higher than the cost of goods sold under LIFO.

538 day(s) ago

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Answers (1)

MelonsO 		The correct answer is a.

If inventory costs are increasing, the LIFO method will result in a higher cost of goods sold than FIFO. Under LIFO in such a situation, higher costs are accounted for in cost of goods sold than if FIFO was used.
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Sorry - lame explanation - it is hard to explain - one just needs to spend time figuring out how the concepts of FIFO and LIFO work.

Posted 538 days ago

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Question Title When inventory prices are increasing, the FIFO costing method will generally yield a cost of goods sold that i?
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