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Which of the following statements is correct when inventory unit costs are increasing? Multiple Choice FIFO will result in lower net income and a lower inventory valuation than will LIFO. FIFO will result in higher net income and a higher inventory valuation than will LIFO. LIFO will result in higher net income and lower inventory valuation than will FIFO. LIFO will result in lower net income and a higher inventory valuation than will FIFO.

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Lanuel

Answer:

FIFO will result in higher net income and a higher inventory valuation than will LIFO.

Explanation:

Since we can deduce that the company's inventory unit costs are rising as a result of inflation, so the more recent costs are the higher net income and a higher inventory valuation costs while the older costs are lower.

Hence, First In, First Out (FIFO) will result in higher net income and a higher inventory valuation than will Last In, First Out (LIFO).

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