In periods of rising prices, the ending inventory using the FIFO cost formula will be
A) higher than using the average cost method.
B) can not be determined.
C) lower than average cost.
D) the same as average cost.

Question

Quizplus · Accepted Answer

In periods of rising prices, the FIFO (First-In, First-Out) method results in a higher ending inventory value compared to the average cost method because the most recent, higher-cost items remain in inventory.

In Periods of Rising Prices, the Ending Inventory Using the FIFO