Which of the following is true if the firm uses FIFO for inventories of goods it

Question

Which of the following is true if the firm uses FIFO for inventories of goods it sells to its customers and if those costs are decreasing over time? Question 4 options: FIFO will produce a higher cost of goods sold expense, and hence a higher income before tax and income tax expense than either average or LIFO. FIFO will produce a higher cost of goods sold expense, and hence a lower income before tax and income tax expense than either average or LIFO. FIFO will produce a lower Cost of goods sold expense, and hence a lower income before tax and Income tax expense than either average or LIFO. FIFO will produce a lower Cost of goods sold expense and hence a higher Income before tax and income tax expense than either average or LIFO. Which of the following is true if the firm uses FIFO for inventories of goods it sells to its customers and if those costs are decreasing over time? Which of the following is true if the firm uses FIFO for inventories of goods it sells to its customers and if those costs are decreasing over time? FIFO will produce a higher cost of goods sold expense, and hence a higher income before tax and income tax expense than either average or LIFO. FIFO will produce a higher cost of goods sold expense, and hence a lower income before tax and income tax expense than either average or LIFO. FIFO will produce a lower Cost of goods sold expense, and hence a lower income before tax and Income tax expense than either average or LIFO. FIFO will produce a lower Cost of goods sold expense and hence a higher Income before tax and income tax expense than either average or LIFO. FIFO will produce a higher cost of goods sold expense, and hence a higher income before tax and income tax expense than either average or LIFO. FIFO will produce a higher cost of goods sold expense, and hence a lower income before tax and income tax expense than either average or LIFO. FIFO will produce a lower Cost of goods sold expense, and hence a lower income before tax and Income tax expense than either average or LIFO. FIFO will produce a lower Cost of goods sold expense and hence a higher Income before tax and income tax expense than either average or LIFO. FIFO will produce a higher cost of goods sold expense, and hence a higher income before tax and income tax expense than either average or LIFO. FIFO will produce a higher cost of goods sold expense, and hence a lower income before tax and income tax expense than either average or LIFO. FIFO will produce a lower Cost of goods sold expense, and hence a lower income before tax and Income tax expense than either average or LIFO. FIFO will produce a lower Cost of goods sold expense and hence a higher Income before tax and income tax expense than either average or LIFO.

Explanation / Answer

FIFO will produce a higher cost of goods sold expense, and hence a lower income before tax and income tax expense than either average or LIFO.

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