9. A company decided to change its inventory valuation method from FIFO to LIFO

Question

9.   A company decided to change its inventory valuation method from FIFO to LIFO in a period of falling prices.  What would be the result of the change on ending inventory and cost of goods sold in the year of change

             Ending inventory                Cost of goods sold

a.                 Increase                                 Increase

b.                 Increase                                Decrease

c.                 Decrease                                Decrease

d.                 Decrease                                Increase

Explanation / Answer

9.Increase Decrease

10.d. Impairment loss is recognized when fair value of a long-lived asset exceeds its book value.

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