When costs to purchase inventory regularly decline,which method of inventory costing will yield the lowest cost of goods sold?
A)FIFO.
B)LIFO.
C)Weighted average.
D)Specific identification.
E)Gross margin.

Question

Quizplus · Accepted Answer

LIFO assumes that the most recent inventory purchased is sold first, which means that the lowest cost inventory (initial or earlier purchases) remains in the inventory, resulting in a higher cost of goods sold. Therefore, when the costs to purchase inventory regularly decline, using the LIFO method would result in the lowest cost of goods sold.

When Costs to Purchase Inventory Regularly Decline,which Method of Inventory