Assuming rising prices, which method will give the highest dollar value for cost of goods sold on the income statement?
A) FIFO
B) Average Cost
C) LIFO
D) All of these give equal values for cost of goods sold

Question

Quizplus · Accepted Answer

In a period of rising prices, the Last-In, First-Out (LIFO) method will give the highest dollar value for the cost of goods sold (COGS) on the income statement because it assumes that the most recently acquired (and presumably more expensive) inventory is sold first, leading to a higher COGS.

Assuming Rising Prices, Which Method Will Give the Highest Dollar