In periods of rising prices, which is an advantage of using the
LIFO inventory costing method?
| A. Net income will be the highest and thus reflect the prosperity of the company. |
| B. Cost of goods sold will include latest (most recent) costs and thus will be more realistic. |
| C. Ending inventory will include latest (most recent) costs and thus be more realistic. |
| D. Phantom profits are reported |
Answer
Cost of goods sold will include latest (most recent) costs and thus will be more realistic.