Which of the following statements is accurate?

A. When unit costs increase, and quantities either remain constant or increase, LIFO allocates a lower amount of the total cost of goods available for sale to cost of sales on the income statement and a higher amount to ending inventory on the balance sheet.

B. When unit costs increase, and quantities either remain constant or increase, FIFO allocates a lower amount of the total cost of goods available for sale to cost of sales on the income statement and a higher amount to ending inventory on the balance sheet.

C. When unit costs decrease, and quantities either remain constant or increase, FIFO allocates a lower amount of the total cost of goods available for sale to cost of sales on the income statement and a higher amount to ending inventory on the balance sheet.

Correct Answer: B

Whenever inventory unit costs rise and inventory quantities either remain constant or increase, FIFO allocates a lower amount of the total cost of goods available for sale to cost of sales on the income statement and a higher amount to ending inventory on the balance sheet.

A is incorrect because it describes FIFO, and not LIFO.

C is incorrect because under those circumstances (declining prices) FIFO allocates a higher amount of the total cost of goods available for sale to cost of sales on the income statement and a lower amount to ending inventory on the balance sheet, and not the reverse as indicated.