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Which of the following statements is correct? Multiple Choice LIFO results in the same net income as FIFO when costs are rising. O FIFO results in a lower net income than LIFO when costs are rising. LIFO results in a higher net income than FIFO when costs are rising, C LIFO results in a higher net income than FIFO when costs are falling.

Asked By CelestialWinds73 at

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James

Expert · 1.5k answers · 1k people helped

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Solution :

"LIFO results in a higher net income than FIFO when costs are falling". This statement is true of the given statements.

Explanation:

This is because when costs rae falling, Cost of goods sold will be lower under LIFO as under LIFO, COGS is based on latest available units. Consequently due to lower cost of goods sold, net income will be higher using LIFO.

Final Answer

Last option "LIFO results in a higher net income than FIFO when costs are falling" is correct.

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