In periods of rising costs, the inventory method which gives the lowest possible ending inventory cost is the
A) FIFO method.
B) LIFO method.
C) weighted-average method.
D) lower of cost or market inventory method.

Question

Quizplus · Accepted Answer

In periods of rising costs, the Last In, First Out (LIFO) inventory method results in the lowest possible ending inventory cost because it assumes that the most recently acquired (and presumably more expensive) items are sold first, leaving the older (and cheaper) items in inventory.

In Periods of Rising Costs, the Inventory Method Which Gives