Asked by
Hannah Herrera
on Oct 28, 2024
Verified
Under the LIFO cost flow assumption during a period of rising costs,which of the following is false?
A) Cost of goods sold will be lower under LIFO than under FIFO.
B) Net income will be lower under LIFO than under FIFO.
C) Income tax expense will be lower under LIFO than under FIFO.
D) Ending inventory will be lower under LIFO than under FIFO.
LIFO Cost Flow
A method of stock valuation where the latest items added to the inventory are the first ones to be sold.
Cost of Goods Sold
The direct expenses tied to the production of goods sold by a company, including material and labor costs.
Net Income
A company's profit amount after all deductions for expenses and taxes from revenue have taken place.
- Assess the effect of different inventory accounting approaches (LIFO, FIFO, Average) on financial indicators.
- Gain insight into the significance of inventory turnover and the procedure for its calculation based on assorted costing approaches.
Verified Answer
KN
Learning Objectives
- Assess the effect of different inventory accounting approaches (LIFO, FIFO, Average) on financial indicators.
- Gain insight into the significance of inventory turnover and the procedure for its calculation based on assorted costing approaches.