In a period of rising prices and stable or increasing inventory quantities, use of the first in, first out (FIFO) inventory cost flow assumption results in all of the following EXCEPT: （）
A. higher earnings before taxes than under last in, first out (LIFO).
B. higher earnings after taxes than under last in, first out (LIFO).
C. lower inventory balances than under last in, first out (LIFO).
参考答案：C
解析：
Ending Inventory under FIFO includes more recently purchased higher cost goods than under LIFO. The LIFO inventory consists of older, cheaper goods. Both before and after tax earnings under FIFO will be higher because less expensive goods are used for the cost of goods sold (COGS). Working capital, which is equal to current assets-current liabilities will also be higher under FIFO due the higher inventory balance causing a higher level of current assets.