Accounting JAMB

If a company values its stock in the period of rising prices using LIFO method; there is a tendency for it to?

A. have a higher cost of goods sold
B. have a higher gross profit
C. pay higher gross profit
D. have a higher value for closing stock

Correct Answer:

Option A – have a higher cost of goods sold

Explanation

During periods of inflation (rise in prices), the use of LIFO will result in the highest estimate of cost of goods sold among the three approaches, and the lowest net income.

Sunday

Share
Published by
Sunday
Tags: Accounting

Recent Posts

List of Universities Offering Veterinary Medicine in Nigeria

Veterinary medicine is the branch of medicine that deals with the prevention, diagnosis, and treatment…

2 months ago

List of Universities Offering Anthropology in Nigeria

Anthropology is the scientific study of human beings and their cultures. It encompasses a wide…

2 months ago

List of Universities Offering Sociology in Nigeria

Sociology is the scientific study of human society, culture, and behavior. It examines the social…

2 months ago

List of Universities Offering Social Work in Nigeria

Social Work is a profession dedicated to helping individuals, families, and communities to cope with…

2 months ago

List of Universities Offering Religious Studies in Nigeria

Religious studies is an academic discipline that explores the beliefs, practices, and history of various…

2 months ago

List of Universities Offering Public Administration in Nigeria

Public administration is the field of study and practice that focuses on the organization and…

2 months ago