If merchandise inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the highest net income is
A) periodic
B) LIFO
C) FIFO
D) average

Question

Quizplus · Accepted Answer

FIFO (First-In, First-Out) assumes that the oldest inventory items are sold first. In a period of rising prices, the older, cheaper costs are matched against current revenues, resulting in higher net income.

If Merchandise Inventory Is Being Valued at Cost and the Price