anshultongia

Answer is absolutely correct !!!
Read the question again it says “PRICES ARE DECREASING.” So LIFO COGS and FIFO inventory reflect lower (current) market prices.
but what if PRICES ARE INCREASING
then higher prices are reflected in FIFO inventory ( cheap items are sold first, expensive items are in inventory) and in LIFO COGS ( expensive items are sold first so COGS is higher and reflecting current prices.)   
Now read both scenarios again, same thing is stated twice
Either prices increase or decrease FIFO inventory and LIFO COGS reflect the most recent events. (and vice versa that’s why FIFO COGS and LIFO inventory always need adjustments)