Accounting · Inventory Valuation
Which of the following statements is/are correct regarding inventory valuation methods? Statement 1: In periods of rising prices, the cost of production (or cost of goods sold) is lower in the FIFO method compared to LIFO. Statement 2: In periods of falling prices, the ending inventory is valued in the FIFO method at a price lower than that in the LIFO method.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both Statement 1 and Statement 2 are correct✓
- 2Only Statement 1 is correct
- 3Both Statement 1 and Statement 2 are incorrect
- 4Only Statement 2 is correct
Correct answer
Both Statement 1 and Statement 2 are correct
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