Question

Which of these inventory changes would be accounted for prospectively? Select one: a. FIFO to LIFO, but not LIFO to FIFO b. LIFO to FIFO, but not FIFO to LIFO c. Both FIFO to LIFO and LIFO to FIFO d. Neither FIFO to LIFO nor LIFO to FIFO

Answer 1

Answer: a. FIFO to LIFO, but not LIFO to FIFO

Explanation:

Well the inventory changes which would likely be accounted for is the FIFO ( first in first out system ) to LIFO ( last in first out system ). But not the LIFO ( last in first out )  to FIFO ( first in first out ). This system are mostly used in sales where for FIFO the first goods to arrive leaves first and for LIFO the opposite of FIFO