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Basic Question 9 of 10
During periods of sustained rising prices, how will the liquidation of early LIFO layers affect a company's cost of goods sold, net income, and income tax liability, respectively?
B. decrease; decrease; increase
C. decrease; increase; increase
A. increase; increase; increase
B. decrease; decrease; increase
C. decrease; increase; increase
User Contributed Comments 1
| User | Comment |
|---|---|
| Antoinepo | Key word : Liquidiation. Since it affect older inventory , their cost is lower then the new one which lowers the average cost and lower COGS. |
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
describe the presentation and disclosures relating to inventories and explain issues that analysts should consider when examining a company's inventory disclosures and other sources of information
CFA® 2025 Level I Curriculum, Volume 2, Module 6.