An entity changed from the fifo to the lifo cost flow, Ask an Expert

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An entity changed from the FIFO to the LIFO cost flow assumption for inventories. Assuming that inventory and sales remain constant over time, and that prices are rising, how would the current ratio be changed as a result of converting from FIFO to LIFO?

A) The current ratio did not change.

B) The current ratio increased.

C) The current ratio decreased.

D) The effect on the current ratio cannot be determined from the information given.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M974219

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