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)average cost.
C)LIFO.
D)All methods will generate the same cost of merchandise sold.

Question

Quizplus · Accepted Answer

LIFO (Last-In-First-Out) assumes that the last goods purchased are the first ones sold, which will result in reporting the highest cost of goods sold during a period of rising prices. This is because the newer, more expensive inventory will be matched with the sales, while the older, cheaper inventory will be left on the balance sheet as ending inventory.

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