Which of the Following Will Occur When Inventory Costs Are

question 81

Multiple Choice

Which of the following will occur when inventory costs are decreasing?

• A)FIFO will result in a lower net income but a higher ending inventory then will LIFO.
• B)FIFO will result in a higher net income but a lower ending inventory then will LIFO.
• C)FIFO will result in a lower net income and a lower ending inventory then will LIFO.
• D)FIFO will result in a higher net income and a higher ending inventory then will LIFO.

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Definitions:

Purchase Price

The amount of money paid or agreed to be paid by the purchaser to the seller for acquiring goods, assets, or services.

Collateral

Property or assets that a borrower offers to a lender to secure a loan.

Guarantor

is an individual or entity that agrees to be responsible for another's debt or performance under a contract, if the original party fails to meet their obligations.

Principal Debtor

The main individual or entity obligated to repay a debt or loan in the terms of a financial agreement.