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

Question

Quizplus · Accepted Answer

During a period of inflation, using FIFO (First In, First Out) will approximate a company's current cost of ending inventory because it assumes that the oldest items are sold first, leaving the most recently purchased (and likely more expensive) items in inventory.

During a Period of Inflation, Using ___ Will Approximate a Company's