During periods of rising prices,firms that want to report more attractive profits would tend to favour the FIFO technique of inventory valuation.

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FIFO (First-In-First-Out) assumes that the goods sold are from the oldest inventory available, leading to higher cost of goods sold (COGS). This results in lower reported profits during times of rising prices. Therefore, firms would prefer to use the FIFO technique during these periods to report more attractive profits.

During Periods of Rising Prices,firms That Want to Report More