If Acker Company wanted to report the highest net income for July, which inventory cost flow assumption should they use?
A)FIFO
B)Net realizable value
C)Average cost
D)Specific identification

Question

Quizplus · Accepted Answer

FIFO (First-In, First-Out) typically results in the highest net income during periods of rising prices because the oldest (and usually lower cost) inventory is used up first, leaving the newer (higher cost) inventory on hand.

If Acker Company Wanted to Report the Highest Net Income