In case of rising prices (inflation), LIFO will:

April 15, 2024 by rawan239

first items that are sold. In a period of rising prices, this means that the cost of goods sold will be based on the higher prices of the most recent purchases. This will result in a lower profit margin.

The other options are incorrect for the following reasons:

• Option A is incorrect because LIFO will provide the highest value of closing stock, not the lowest value.
• Option B is incorrect because LIFO will provide the lowest value of profit, not the highest value.
• Option D is incorrect because LIFO will provide the highest value of closing stock, not the lowest value.

I hope this explanation is helpful. Please let me know if you have any other questions.