When the cost of purchasing inventory is declining,which inventory cost flow method will produce the highest amount of cost of goods sold?
A)Weighted-average
B)LIFO
C)FIFO
D)LIFO,FIFO,and weighted-average will all produce the same amount of cost of goods sold.

Question

Quizplus · Accepted Answer

When prices are declining,FIFO will produce the highest cost of goods sold (earliest purchases)compared with LIFO which will be based on more recent,lower priced purchases.Weighted average will be somewhere in between.

When the Cost of Purchasing Inventory Is Declining,which Inventory Cost