Accounting for IGCSE & O level - Final Statements (Section 2 - No. 24)

What are the effects of rising prices in the use of the LIFO method?

Lower cost of goods sold, leading to a higher net income and higher tax liability.

Higher cost of goods sold, leading to a lower net income and lower tax liability.

Lower cost of goods sold, leading to a lower net income and lower tax liability.

Higher cost of goods sold, leading to a higher net income and higher tax liability.

LIFO will always show higher costs in rising prices