During periods of inflation, the use of FIFO (rather than LIFO) as the method of accounting for inventories causes

A) higher reported sales.
B) higher incomes taxes.
C) lower ending inventory.
D) higher incomes taxes and lower ending inventory.
E) None of the options are correct.

FIFO

First-In, First-Out, an accounting method for valuing the cost of goods sold that assumes the first items placed in inventory are sold first.

LIFO

Last In, First Out, an inventory valuation method where the most recently produced or acquired items are sold or used first.

Inflation

The velocity at which the aggregate cost of goods and services ascends, thereby reducing the efficacy of purchasing power.