WebTranscribed image text: Question 10 Not yet answered Marked out of 2.00 p Flag question During periods of inflation, the FIFO cost flow assumption will yield a higher cost of goods sold than LIFO Select one: True e False Previous questionNext question COMPANY About Chegg Chegg For Good College Marketing Corporate Development Investor Relations WebDuring periods of inflation, the use of fifo (rather than lifo) as the method of accounting for inventories causes _____. A. Higher reported sales b. Higher incomes taxes c. Lower …
Accounting; Lifo/Fifo Flashcards Quizlet
WebOct 29, 2024 · FIFO assumes that cheaper items are sold first, generating a higher profit than LIFO. However, when the more expensive items are sold in later months, profit is lower. LIFO generates lower profits in early periods and more profit in later months. FIFO is the more straightforward method to use, and most businesses stick with the FIFO method. WebApr 7, 2024 · In an inflationary period, FIFO (or First-in, First Out) will result in higher immediate profit margins. The cost of older goods will be lower than the cost of newer … howl youth
Inflation and Deflation of Inventory Costs CFA Level 1 - AnalystPrep
WebThe FIFO approach yields a higher value of the final stock, lesser cost of goods sold, and greater gross profit during inflation. This is because in an inflationary market when FIFO is applied, the old stock cleared first leaves behind the costlier items in the balance sheet, to be sold at a higher price in the future. Webusing LIFO during periods of inflationary product costs and from using FIFO during periods of deflationary product costs. Individual product costs were also unknown. In … WebMay 21, 2024 · The FIFO method is the standard inventory method for most companies. FIFO gives a lower-cost inventory because of inflation; lower-cost items are usually older. Last-In, First-Out (LIFO) LIFO is a newer inventory cost valuation technique (accepted in the 1930s), which assumes that the newest inventory is sold first. howl-o-ween werewolf - eyes glow in the dark