During a period of inflation, using the __________ cost formula will approximate a company's current cost of ending inventory.
A)Average cost
B)FIFO
C)Lower of cost and net realizable value
D)Both FIFO and average cost

Question

Quizplus · Accepted Answer

During inflation, FIFO (First-In, First-Out) assumes that the oldest costs are used up first, leaving the most recent costs in ending inventory, thus approximating current costs.

During a Period of Inflation, Using the __________ Cost Formula