Which of the following statements is most

问题单项选择题

Which of the following statements is most accurate, assuming stable inventory quantities In a period of:（）

A. falling prices, FIFO results in higher COGS and higher taxes.

B. rising prices, LIFO results in higher cash flows and higher net income.

C. rising prices, FIFO results in higher taxes, lower cash flows and higher working capital while LIFO results in higher COGS and lower inventory balances.

答案

参考答案：C

解析：

In a period of rising prices, LIFO results in higher COGS, lower taxes, lower net income, lower inventory balances, lower working capital, and higher cash flows due to less taxes paid out. In a falling price environment, it is the reverse. Also, FIFO inventory leads to opposite results for both rising and falling prices.