In periods of rising prices, the inventory method which results in the inventory value on the balance sheet that is closest to current cost is the

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The FIFO (First-In, First-Out) method assumes that the first units of inventory purchased are the first ones sold, meaning that the cost of the oldest inventory is matched against revenue first. In a period of rising prices, this method results in the inventory balance on the balance sheet being valued at the cost of the most recent purchases, which is most similar to current cost.

In Periods of Rising Prices, the Inventory Method Which Results