In a period of declining prices,which of the following inventory methods generally results in the lowest balance sheet figure for inventory?
A)LIFO
B)Cannot tell without more information
C)FIFO
D)Average-cost

Question

Quizplus · Accepted Answer

In a period of declining prices, the FIFO (First In, First Out) method generally results in the lowest balance sheet figure for inventory. This is because FIFO assumes that the oldest items (which were presumably purchased at higher prices) are sold first, leaving the more recently purchased, cheaper items in inventory.

In a Period of Declining Prices,which of the Following Inventory