During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of merchandise sold is
A) FIFO
B) LIFO
C) average cost
D) weighted average

Question

Quizplus · Accepted Answer

LIFO (Last In, First Out) assumes that the most recent inventory purchases are sold first, and therefore the cost of goods sold reflects the higher prices of the more recently acquired goods. In a period of consistently rising prices, LIFO will result in reporting the greatest cost of merchandise sold.

During a Period of Consistently Rising Prices, the Method of Inventory