**Current Attempt in Progress****Question:** In a period of rising prices, the cost of goods sold will be less under FIFO than LIFO since the company is selling the older, less costly goods.Feedback (incorrect): A red box indicates the answer is incorrect.**Question:** In a period of rising prices, FIFO will result in:- ( ) lower net income than LIFO.- ( ) lower net purchases than LIFO.- ( ) lower cost of goods sold than LIFO.- (X) lower income tax expense than LIFO.The selection shows that “lower income tax expense than LIFO” was chosen.**Buttons:**- "Save for Later"- "Submit Answer"Attempts: 1 of 2 used.

Inventory valuation is the process by which the inventory of the entity is valued. It can be done using various methods such as FIFO, LIFO and weighted average. In the times of rising prices or inflation, the FIFO method would result in lower cost of goods sold and higher net income as compared to LIFO because the inventory that has been bought at first must be of lower price resulting in lower cost and higher amount of ending inventory. Thus, 'lower cost of goods sold than LIFO' is correct answer.

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Accounting

In a period of rising prices, FIFO will result in O lower net income than LIFO. lower net purchases than LIFO. O lower cost of goods sold than LIFO. O lower income tax expense than LIFO. eTexthook and Media

In a period of rising prices, FIFO will result in O lower net income than LIFO. lower net purchases than LIFO. O lower cost of goods sold than LIFO. O lower income tax expense than LIFO. eTexthook and Media

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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