When Inventory Costs Are Increasing with No LIFO Liquidation

question 18

Multiple Choice

When inventory costs are increasing with no LIFO liquidation:

• A)FIFO cost of goods sold will be higher than LIFO cost of goods sold.
• B)FIFO ending inventory will be lower than LIFO ending inventory.
• C)FIFO cost of goods sold will be lower than LIFO cost of goods sold.
• D)FIFO and LIFO will result in the same cost of goods sold and ending inventory.

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Definitions:

Service Company

A business that provides intangible products or services to customers or clients, as opposed to selling physical goods.

Purchasing Cycle

A sequence of steps or procedures undertaken by a business to acquire goods or services from suppliers.

Merchandising Company

A business that purchases finished products and sells them to consumers without changing the physical form of the goods.

Create Purchase Order

A document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services.