In order to attract investors and borrow on favorable terms, a company would use ________ in times when inventory costs are rising.
A)LIFO
B)FIFO
C)average costing
D)specific-identification costing

Question

Quizplus · Accepted Answer

FIFO (First-In, First-Out) accounting method would be used by a company to attract investors and borrow on favorable terms when inventory costs are rising because it results in higher reported profits and inventory values, as the older, cheaper inventory is recorded as sold first.

In Order to Attract Investors and Borrow on Favorable Terms